Much has been made of the depressive effect on global oil prices of new supplies of Iranian crude unleashed with the lifting of Western sanctions. But oil isn’t the only hydrocarbon Iran is sitting on: companies around the world are looking to nudge their way into the country to rejuvenate its long-dormant gas industry. The EU, for one, hopes to import huge quantities of Iranian gas by the end of the next decade. The WSJ reports:
The European Commission now believes that the bloc could import between 25 billion and 35 billion cubic meters of gas a year from Iran by 2030, according to a European official and a representative of a European energy company. That would put future gas supplies from Iran on a similar level to current imports from North Africa and help reduce the bloc’s dependence on shipments from Russia. Russia currently ships around 130 BCM a year to the EU.
New Iranian gas supplies are seen as one route for Europe to decrease its reliance on Russia, a supplier that is fond of attaching strategic strings to its deals. But getting those goods to market won’t be an easy task, as Moscow’s decision to engage more directly with Ankara will make it difficult to send supplies through Turkey. Tehran would most likely liquify its gas and ship it to Spanish ports, necessitating the construction of new pipeline infrastructure connecting the Iberian peninsula with the rest of the continent. The costs of liquefaction and pipeline investment won’t make Iranian LNG the cheapest option, but it will give European buyers more leverage in their dealings with Gazprom.Despite the logistical hurdles, Brussels is hopeful it can boost imports of Iranian gas to levels as high as 35 billion cubic meters annually, roughly a quarter of what Europe buys from Russia.