Iranian pipeline to Europe: Will Gazprom help its rival?

Iran is planning to build IGAT-9, a new gas pipeline from the South Pars field to the Turkish border with a view to export gas to Europe and Gazprom will help it in the matter. Deputy Oil Minister of Iran and Managing Director of the National Iranian Gas Company Hamid-Reza Araghi has welcomed Russia’s partnership in building this 1,863-km long pipeline. The estimated cost of the project is $2.5bn.

Mehr quotes Araghi as saying that gas production in Iran has already grown to 700mn c m a day and if the project is carried out, it will amount to 1bn c m.

IGAT-9 is supposed to pump 100mn c m a day or more than 35bn c m a year. This is almost 7% of what Europe consumes.

This is not a new project though. Before the sanctions, the Iranians were going to build a Persian Pipeline with a 400-km long section in Turkey - an Iranian-Turkish project to be financed by China.

As of today, Iran is exporting 9bn c m a year – mostly to Turkey and also to Armenia and Azerbaijan in exchange for electric power.

According to Araghi, Gazprom may help the Iranians to build compressor stations, underground storage facilities and may provide some technologies. This is stipulated by a memorandum of mutual understanding signed by Gazprom and NIGC on Dec 13, 2016. But, according to Gazprom’s Deputy CEO Alexander Medvedev, the company is more interested in LNG production and pipeline supplies to India.

Experts see Iran as Gazprom’s possible partner for swap deliveries to Asia. But none of them mentions Europe. So, IGAT-9 is just one more Europe-bound gas route bypassing Russia.

“There is no such project. The Iranians have some ideas about how they could use their capacities. But they first need to develop their infrastructure and to enlarge their production. They already have a gas pipeline to Turkey, which they are yet unable to fill,” says Alexey Grivach, Deputy Director General of the National Energy Security Foundation.

According to him, Russia and Iran are old partners. Iran’s first gas pipeline was built by Soviet specialists and was also used for swap deliveries: Iran supplied gas to the south of the USSR, while the Soviet Union exported “Iranian” gas to Europe. “So, if this project is launched, why not to take part in it,” Grivach says.

Turkey may also prove to be a problem for the project. The pipeline is supposed to run via the territories where the Turks are fighting Kurds. Besides, in 2020, Iran will get access to TANAP, a pipeline that is supposed to pump Azerbaijani gas via Turkey to Europe.

“The only problem here is that TANAP will be controlled by Azerbaijan and I am not sure that the Azerbaijanis will agree to pump rival gas from Iran,” Grivach says.