Wednesday 13 August 2014

Iran ready to revive Nabucco pipeline project and supply gas to Europe

Iran ready to revive Nabucco pipeline project and supply gas to Europe
Iran’s Deputy Oil Minister for International Affairs has said that Iran is ready to supply Europe with gas via the previously aborted Nabucco pipeline, adding that two European countries have already shown interest.

Speaking to the Islamic Republic News Agency (IRNA) on 11 August, Deputy Oil Minister for International Affairs, Ali Majedi, said that, with its major gas fields, Iran could supply gas to Europe via Nabucco and that the abortive gas pipeline project was useless without Iran.

As the international community considers lifting the sanctions against Iran, corporations and governments are strategically positioning themselves to take advantage of Iranian trade possibilities. Delegations from two European countries have already visited Iran this summer to discuss possible routes for gas deliveries, Majedi revealed without naming the countries. He continued that different routes were possible, including supplies via Turkey, Iraq, Syria, Caucasia and the Black Sea, adding that he saw the Turkish route as the most viable option.

The deputy minister said gas from the Shah Deniz gas field in the Caspian Sea would not be solely sufficient for the pipeline, as production at Shah Deniz would not exceed eight billion cubic meters a year, while the designed capacity of the pipeline is at least 23 billion cubic meters, therefore necessitating the need for Iranian involvement. 

Nabucco is an abortive project of a 3,300-kilometer-long gas pipeline from Turkmenistan and Azerbaijan to Germany and Austria and on to the rest of the EU. The project was estimated at €7.9 billion, although in 2012 it was estimated that the project may cost less. OMV Gas GmbH (Austria), BOTAS (Turkey), Bulgargaz (Bulgaria) and Transgaz (Romania) were parts in the consortium for pipeline construction.

Work on the project began in 2002. Initially, plans were to launch the construction in 2011, finishing it by 2014, but the project was repeatedly postponed because of problems with possible gas suppliers. In 2011, it was reported that the launch date was shifted to late 2018. In June 2013, an announcement came that the project had been closed in favour of a more promising project - the Trans-Adriatic pipeline.

For more news and expert analysis about Iran, please see Iran Strategic Focus.

© 2014 Menas Associates

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