Iran seems confident as EU prepares gas import ban

Posted on October 9, 2012


Up until now, Iran has mostly been worried about its oil exports, thanks to numerous sanctions imposed on the country from the U.S., and Europe.

Now, it seems like EU is considering imposing a ban on Iran’s gas exports, as part of a set of new measures to ratchet up pressure on the Islamic Republic over its nuclear program.

Diplomats from EU member states have started preparing a package of sanctions against Iran with a goal of formally adopting them at a meeting of foreign ministers on October 15th 2012 in Luxembourg.

Reuters reported that according to some of the diplomats, some countries, including Germany, Britain and France support the ban agreement.

Iran on its part does not seem to be worried too much about the ban becoming active. The Islamic Republic holds world’s second place in the world for natural gas reserves, and is first in the region among natural gas producing countries in the region, followed by Qatar and Saudi Arabia.

Iran’s natural gas production (excluding gas flares or recycled gas) has increased in 2011 by 5,6 bcm compared to 2010, according to BP’s June 2012 World Energy review report.

In 2010 Iran’s natural gas production was estimated at 146,2 bcm, and this figure reached 151,8 bcm in 2011.

Several days after the news on “gas ban” gone viral, Iranian officials started expressing their opinion on it.

As an example, spokesman for the Iranian Oil Ministry Ali Nikzad called it “propaganda”, which basically means Iran is not worried much about the ban, or does not really believe that the ban will actually be implemented.

Nikzad also noted that “for the time being, no gas is being exported to EU”, adding that the new “EU threat will never take place since the EU members  can never make themselves politically dependent on other countries”.

Regarding Iran’s current exports, the Islamic Republic transports its gas to Turkey, and also should be exporting around 25 million cubic meters of gas to Pakistan in 2014.

According to Fars news, Iran has been holding talks with Switzerland and Greece regarding gas exports, and also should export around 200 million cubic meters of gas to Kuwait, Oman, Bahrain, and UAE, during its 5-year development plan.

As far as imports go, Iran only deals with Turkmenistan, importing around 10,5 billion c/m of gas annually.

For the time being, Iran can allow itself to be confident, or at least seem so, because country’s main importers are outside of Europe, the country has enough of gas for domestic use, and with regard to imports, the Islamic Republic deals with only one country in Central Asia, which is Turkmenistan.

Last month, ISNA reported that Iranian parliament (Majlis) said it plans to discuss a bill, which may vote for stopping exports of crude oil in winter to countries which have imposed sanctions against the Islamic Republic’s oil sector.

Head of Parliament’s Energy Commission Masud Mir Kazemi said that “in winter the oil demand will increase, reaching its peak”, adding that if the bill is approved, Iran will not be selling any oil to those European countries.

Islamic Republic can take a similar position regarding its gas exports. Thus far, judging by both official statements and online news reports, the possible gas ban is not the most alarming problem that Iran is worried about. Whether the situation changes or not, the next couple of months will show.