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EU in ‘unofficial talks’ for Iran gas imports

13 May 2015 12:13


The European Union has started “unofficial talks” with Iran for imports of gas, the Fars news agency says, citing an informed source.

Some Caspian littoral states have also asked Iran to join a network of pipelines which is being built to transfer gas to Europe, it added.

The Europeans have started a flurry of efforts to reduce dependence on the Russian gas and diversify their sources amid their rising tensions.

Iranian officials, however, say the pipeline transport of gas has lost appeal and the country is looking into other modes for possible shipments to Europe.

Demand for the Iranian gas is rising amid hopes that current nuclear negotiations with the country would lead to a final agreement and removal of sanctions.

“As long as Iran’s political negotiations with the P5+1 countries have not reached a definite conclusion, these requests would not be official,” Fars quoted the unnamed source as saying.

The source said several European oil and trade delegations have travelled recently to Iran and discussed gas imports from Iran as well as investments in the sector with senior Iranian oil officials, the news agency added.

Iran has told the Europeans that it was able to build pipelines and the related facilities for transfer of gas and only needed European investment to expedite work, Fars said.

Iranian officials say liquefied natural gas is the most suitable option to sell gas to Europe.

Last week, Minister of Petroleum Bijan Zangeneh discussed German investments in Iran’s oil, gas and petrochemical industries.

Zangeneh met German Energy Minister Sigmar Gabriel in Berlin where the Iranian minister was to attend the third annual energy security summit.

German companies are vying to regain their foothold which they lost in Iran under intensified European and US sanctions in 2011.

On Saturday, Zangeneh said exports of natural gas to Europe are not among Iran’s priorities because gas prices are too low. The pipeline gas transfer involves the high cost of transit which makes it uneconomical.

“Given the gas price decline in Europe, the economic viability of the project has probably decreased. Besides, the market share of single shipments and LNG has grown,” CEO of the National Iranian Oil Company Rokneddin Javadi said in Tehran last week.

Liquefied natural gas is the most suitable option to sell gas to Europe, according to Zangeneh, but that option won’t be available for another three years.

Iran has mothballed its LNG plans because of the sanctions and their revival depends on the result of the ongoing nuclear negotiations.

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