Russia gas pact energizes Iran

While Washington, facing European Union discomfort and frank opposition from Russia and China, remains obsessed with another round of United Nations sanctions against Iran, the facts on the ground spell an overwhelming “expansion of mutual cooperation” in the energy sector between Iran and Russia.

Iran holds the world’s second-largest proven natural gas reserves, behind only Russia. Alexei Miller, chief executive of Russia’s state-run gas exporter Gazprom, recently visited Tehran and met with Iran’s Oil Minister Gholam-Hossein Nozari. The result is that Gazprom will develop “two or three” blocks of the monstrous South Pars gas field in Iran; and its daughter company, Gazpromneft, will also be part of a huge oil project in Iran. Gazprom has been in South Pars since 1997, alongside

TotalFinaElf of France and Malaysia’s Petronas.
For Iran, this is really big news. Reza Kasaeizadeh, the managing director of Iran’s National Gas Company, now insists that Iran will supply no less than 10% of the world gas market in the next 20 years; currently it’s only 1%. Iran at the moment exports gas only to Armenia and Turkey. When South Pars phases 17, 18 and 19 are developed by 2013 that will be a whole different ball game. South Pars – which Iran shares with Qatar – is the largest gas field in the world. Annual output of its eight blocks on the Iranian side stands at 73 billion cubic meters; in the next few years it will easily reach 200 billion cubic meters.

Hardcore Washington political pressure on European giants such as TotalFinaElf and Royal Dutch Shell as well as on European banks is leading Gazprom to make a killing in Iran. Russia is left virtually alone to develop the second-largest (after Russia) gas reserves in the world. Gazprom’s technology may not be as state of the art as Western Europe’s, but Iran is in a hurry. And so is Gazprom, while it is able to extract fabulous deals thanks to lack of competition.

Asia Times