Iran-Russia front seeking sway over EU gas market

Mena Fn. Com – It has been thought that once freed from sanctions, #Iran would become a serious rival for Russia in the European gas market. Russia is currently Europe’s top gas supplier.

Gazprom PJSC, the state-run gas exporter shipped a record amount of gas to the#EuropeanUnion last year that accounted for about 34 percent of the trading bloc’s use of the fuel.

However, Tehran shows to be an unlikely rival for Russia in the gas market, much the same way it has been an ally on the political front.

‘Iran likes to engage in constructive cooperation with its neighbors,’ said Deputy Oil Minister Abbas Kazemi May 7 when asked by Trend if he thought Russia would back Iran’s projects to export gas to Europe as it supported #Iran in its nuclear talks with the West.

But things do not stop there. #Iran and Russia are actually looking for gas cooperation in the field.

In late March Deputy Oil Minister Hamid Reza Araqi said #Iran and Gazprom were negotiating to carry out joint projects.

One of the projects is joint export of natural gas, Araqi, who heads National Iranian Gas Company (NIGC), said, adding that ‘Iran and Russia are not rivals in the gas sector. Rather, joint activities in this sector will be benefici for the both sides.’

Araqi further said that a joint working group has been formed to determine possible projects and joint activities.

Nevertheless, Gazprom has just begun construction work on the Turkish Stream gas pipeline under the Black Sea to #Turkey to get a better grip on its European market.

‘By late 2019, our Turkish and European consumers will have a new, reliable source of Russian gas imports,’ Alexey Miller, Chairman of the Gazprom Management Committee, said May 7.

As for Iran, according to the International Monetary, its gas output increased by 10 percent in 2016 to 3.26 million barrels oil equivalent per day (mbOE/d) and the figure is expected to reach 3.39 mbOE/d in 2017 and 3.53 mbOE/d in 2018. The gas has already saturated the domestic market and #Iran is eyeing foreign markets.

Tehran was freed from economic sanctions in 2016 and has started refurbishing its gas industry to boost output. As such, the country needs huge amounts of investment to carry out the development projects, most of which it has to seek abroad.

Therefore, it would be a good win-win game if #Iran sought investment in its gas sector from Russia and the product would be exported to Europe with shared benefits.