TEHRAN – A senior energy expert says following the Ukraine war, Iran has the chance to use Russia’s excess gas export capacity to become a regional hub for the item.
According to Fars News, senior energy expert Habibollah Zafarian, referring to the capacity of cooperation between Iran and Russia in the gas market under the $40 billion memorandum of understanding between the National Iranian Oil Company and the Russian Gazprom Company, stated: “Gas trade due to strategic and economic benefits is a very important matter that is emphasized in the country’s upstream documents.”
He added: “In the general policies of the economy of resilience, special emphasis has been placed on increasing gas exports, and in the vision document for 2025 of the oil industry, it has been stated that Iran should achieve a share of 8 to 10 percent of the world’s gas trade. Now Iran’s share of the world’s gas trade is less than 2%.”
The senior energy expert said: “Iran should be able to become a regional gas hub based on gas trade with neighboring countries. Iran’s gas reserves and privileged geographical location allow the country to play an influential role in the gas trade of the region.”
Zafarian added: “Iran’s strategy should be defined in such a way that it buys the surplus gas of the countries of the region as much as possible and exports gas to the consuming countries at a higher price.”
He noted that, “Three countries around us, including Turkmenistan, Qatar, and Azerbaijan, have surplus gas and are now exporting, and the rest of the countries in the region, including Armenia, Turkey, Iraq, Kuwait, and the Persian Gulf littoral states, especially the UAE and Oman, Pakistan, and Afghanistan want to import gas. As a result, there is a great opportunity for Iran to become the gas hub of the region with gas trade between exporting and importing countries.”
Iran’s opportunity for strategic cooperation with Russia in the new gas market order
This senior expert in the field of energy said: “After the developments of the war in Ukraine, changes happened in the gas market, such as Qatar advancing its gas field development plan and increasing the export of liquefied natural gas (LNG) at a faster pace, and recently signed a contract with five European and American companies to develop its fields.”
Zafarian added: “In the recent developments in the gas market, Russia has minimized gas exports to Europe, and the U.S. is trying to increase its LNG exports in order to replace part of Russian gas in the European market.”
“Now an opportunity has been created for Iran to form a strategic cooperation with Russia in this space, and of course this cooperation should be based on Iran’s national interests,” he added. “The two countries of Iran and Russia can form this gas cooperation based on their national interests and create a win-win game.”
Zafarian said: “Now there is an opportunity for Iran and Russia to sit around the same table and divide the gas market between them. Russia is the first and Iran is the second holder of gas resources in the world and they can define an optimal strategy for market development by working together.”
He continued: “We can buy surplus Russian gas in the conflict between Russia and the European Union and use it to become the gas hub of the region. One of the serious suggestions is that Iran can receive the surplus gas from Russia through Turkmenistan. From this route, between 15 and 20 billion cubic meters of gas can be bought from Russia every year and this gas can be exported at a higher price to neighboring countries such as Pakistan and Iraq.”
This senior expert in the field of energy said: “I believe that the model of gas cooperation between Iran and Russia should not be defined as a swap, but as a purchase and sale, because a swap means marketing for the supplying country, that is, Russia, so we should buy Russian gas and sell that to our own export destinations.”
Zafarian said: “Russians can invest in the construction of Iran’s gas export pipeline to Oman and Pakistan. We now have a contract to export gas to Pakistan and we have to export 8 billion cubic meters of gas annually, but this contract has not been implemented so far, which can be revived with the help of Russia.”
The senior energy expert said: “Armenia’s gas network belongs to Russia’s Gazprom. There is an opportunity to increase the export of Iranian gas to Armenia and even to export Iranian gas to Georgia through Armenia. It is also possible to use the political capacity and the excess gas capacity of Russia to increase the gas export to Turkey on the one hand and Iraq and then Syria on the other hand.”
He said: “Moreover, we can help Russia and buy Qatari gas, which is one of the most serious options to replace Russian gas in the European market, and sell it to our destination markets; in this way, with the logic of market division, the Iranian market will be stabilized in the region and the Russian market in Europe, so the Islamic Republic should enter into macro gas relations with Russia with this perspective and strategy.”