According to mass media, two Iranian companies have signed an agreement for the construction of a gas pipeline to transport natural gas from the South Pars field through Iraq and Turkey to Europe.
"Two Iranian companies have signed an agreement for the construction of the 1,300 kilometer pipeline. Its cost is estimated at $2.3 billion, which is to export gas from Iran to Europe. The Iranian gas pipeline IGAT-6 will be laid from the largest gas field of South Pars through neighboring Iraq,'' Tass cites Press-TV.
The contract was signed by the Iranian Engineering Gas Industry Development Company (IGEDC) and the Pasargad Energy Development Company. The customer (IGEDC) is to pay for 25% of construction, operation and transportation. Other investments will be provided by the state National Fund of Iran. Investments will be compensated in the future by the revenue from exporting gas to Iraq, Iraqi Kurdistan and Turkey.
The length of the pipeline to the border with Iraq will be 590 km. The construction of the pipeline and five compressor stations on its route will take two years.
Senior analyst of Uralsib Capital Alexei Kokin said in an interview with a correspondent of Vestnik Kavkaza that the Iranian gas may compete with Russian in the European market, but no earlier than in 2025-2030. "We aware of a potential threat that Iranian gas poses to the Russian exports, and it has been discussed for quite some time. However, analysts consider it a long-term issue, since a construction of pipelines is a costly and complicated project. The landscape in Iran and Turkey as well as the length of the pipeline make this project difficult to implement. But the most important thing is that Iran and Turkey rarely agree on political issues. It is worth noting that the Iranian gas is an absolute competition for Gazprom on the Turkish market, where it can be sold cheaper than the Russian one due to low transit costs,'' the expert said.
According to his estimates, the pipeline will be able to supply about 15-20 billion cubic meters of gas per year. "I think it is the maximum volume that Iran will be able to supply, but this goal can be achieved only 2025-2030," Alexei Kokin noted.
The leading analyst at the National Energy Security Foundation Igor Yushkov reminded, in his turn, that Iran has problems with the gas transit infrastructure.
"The gas pipeline from Iran to Turkey works but it supplies only about 6 billion cubic meters a year, due to the fact that the Iranian domestic gas pipeline network is poorly developed. Iran purchases 9 billion cubic meters from Turkmenistan. Certainly some has been trying for a long time to scare Russia that Iran will become an alternative supplier of gas to Europe. Perhaps sanctions on Iran were lifted precisely in order to achieve this goal,” he pointed out; but it raises a lot of questions" – said Yushkov.
"Americans and Europeans will fully support the idea of building a gas pipeline from Iran to Europe at the political level. But when they start talking money,” – expressed his confidence Igor Yushkov, - “then European companies will choose Russia as the main supplier, since our project is less risky.”
