Europe Needs Iranian Gas

TEHRAN (FNA)- Europe’s hunger for natural gas and its lack of reliable suppliers is leading several countries to court Iran.

This is a delicate situation for the European Union, which also wants to satisfy the US by keeping the pressure on Tehran to give up its nuclear rights.

A look at projections for future gas supplies demonstrates the predicament. By 2030, Europe will depend on foreign producers for 85 percent of its gas, a big jump from the current 57 percent. Further, many European countries are uncomfortable with their reliance on Russian gas giant Gazprom, and are eager to find suppliers that don’t dance to the Kremlin’s tune, an Energy Tribune report said.

Some analysts believe energy needs and security of supply concerns will eventually outweigh geopolitical differences with Tehran. “What we assume is that the current issue will somehow be resolved and ultimately Iranian gas will find a place,” said Ian Ashcroft, principal gas analyst for Edinburgh-based Wood Mackenzie. “We’re not saying how or when, but ultimately, given their large potential gas resource and its location, it’s certainly likely [Iranian] gas will find its way into Europe.”

Iran now has an annual export capacity of 247 billion cubic feet, which according to Wood Mackenzie is expected to increase more than 10-fold to over 2.8 trillion cubic feet by 2020. Those exports will likely be split evenly between Europe and Asia, with India and Pakistan the key Asian customers, said Ashcroft.

Iran’s main western markets will be Turkey, Italy, and Greece, reaching all the way up to Austria. Europe will continue to meet most of its new requirement through Russia and Norway, although the Middle East, North Africa, and the Central Asian republics will take a bigger share.

It remains uncertain how the nuclear standoff will play out, and how that will affect the timeframe for the increase of Iranian imports into Europe.