Pipeliners

25.09.2008 - [Neftegaz.RU] - Iran is planning to construct a $4 billion natural-gas pipeline to the European Union that rivaling projects backed by the EU and Russia. Deputy Oil Minister Akbar Torkan said in an interview in Tehran today that Iran was in talks with a “renowned European company'' that may operate the so-called Pars Pipeline. “Surely, European countries are thinking about creating a lifeline in addition to Russia,'' Torkan said. “Countries that believe buying gas from Iran is important enough and that don't want to be manipulated by others will collaborate.'' Iran have been prevented by international sanctions from drawing the technology and financing necessary to liquefy gas and export it via tankers as LNG, or liquefied natural gas. Iran, which holds the world's second-largest gas reserves after Russia, doesn't export the fuel any farther west than neighboring Turkey. The Pars Pipeline is Iran's answer to the EU-backed Nabucco link and OAO Gazprom's South Stream project, Torkan said. Those projects are competing to supply western Europe with Caspian gas. He declined to provide a timeline. Iran hopes to pipe as much as 37 billion cubic meters of gas to Europe annually, about 20 percent more than either Nabucco or South Stream. Russia, which supplies about a quarter of Europe's gas needs, is planning to increase that share by building South Stream under the Black Sea and the Nord Stream link under the Baltic. U.S.-imposed restrictions on foreign investment in Iran, designed to punish the government for pursuing a nuclear program, won't scare off European partners in the pipeline, Torkan said. “No one says that Iran's customers can't invest outside the country,'' he said. “We will bring the gas up to the border, they will build the pipeline up to there.'' Torkan declined to name the European company holding talks on the pipeline, saying only that it isn't Austria's OMV AG, which heads Nabucco. The EU-backed project from Turkey and the Balkans to western Europe still has no supply base and hasn't ruled out taking Iranian gas. “We have no contract and no engagement with Nabucco,'' Torkan said. ``We have come up with a new route and will have new customers.'' From Iran, the Pars Pipeline will cross Turkey, passing on to Greece, Italy and onward to Switzerland, Austria and Germany, Torkan said. Eastern Europe will be completely avoided, he said, and all countries along the route will also buy Iranian gas. Iran will tap its South Pars field, the world's single largest gas deposit, to supply the Pars Pipeline. European companies such as Royal Dutch Shell Plc, France's Total SA and Spain's Repsol YPF have curbed LNG projects at South Pars because of the increased political risk of investing in Iran. South Pars gas exports would be more cost-effective through a pipeline rather than as LNG, Torkan said. The lack of a unified pipeline system within Iran means that the northern part of the country relies on gas imports from neighboring Turkmenistan. Northern Iran, where Tehran is located, experienced a gas shortage during unseasonably cold weather earlier this year.