1. Potential Gas Export from Iran to Europe by Pipeline
Dr. Narsi Ghorban
International Institute for Caspian Studies
World Energy Council (German Committee)
(DNK Energy Day)
29th of October 2009
Berlin, Germany

2. The International Institute for Caspian Studies
CONTENT
Regional Gas Reserves, Supply and Demand.
Does Iran have enough gas for all planed domestic and Export projects?
What are the Main Issues that will effect Iranian Gas export projects?
The Potential pipeline Routes for Gas Export to Europe
Main Points
Berlin, Oct 29th 2009
The International Institute for Caspian Studies

3. The International Institute for Caspian Studies
Estimated Gas Reserves and Production in the Caspian Region Source: BP Statistical Review of World Energy 2009
Reserves at end of Production ( In Trillion cubic Meters) ( In Billion cubic Meters)
AZERBAIJAN
KAZAKHSTAN
TURKMENISTAN
TOTAL
Russia
Iran* *Iran’s reserves are estimated by the Government at around 30TCM Iran’s gas production was over 130 billion cubic meters last year. Iran could become the third largest gas producer in the world in 5 years time.
Berlin, Oct 29th 2009
The International Institute for Caspian Studies

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Basic Regional Gas Statistics Source: BP Review of world Energy Statistics 2009 (Figures in billion cubic meters)
Gas Reserves % of the World % of the ME Middle East , Iran , Qatar , Saudi Arabia , UAE____________ 6,430______ ___ 3.5_____________8.4
Gas Production % of the World % of the ME Middle East Iran Qatar Saudi Arabia UAE_____________49 __________ 1.6___________ 13.2__
Gas Consumption % of the World %of the ME Middle East Iran Qatar Saudi Arabia UAE
Berlin, Oct 29th 2009
The International Institute for Caspian Studies

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Potential Gas Reserves, Production and Export from Caspian Region to Europe
Potential Reserves Potential Production Trillion Cubic Meters Billion Cubic Meters/year
Azerbaijan
Kazakhstan
Turkmenistan
Iran –500
Potential Direct Export to Europe BCM Azerbaijan Iran
Berlin, Oct 29th 2009
The International Institute for Caspian Studies

6. Gas Export from Iran Options to Monetize Iran’s Natural Gas Resources
Domestic Use a) Replace demand for Petroleum Products with gas b) Gas injection in the oil fields (enhance oil recovery) c) Electricity generation using Natural Gas d) Development of Gas Based Industries (Petrochemicals Cement, Iron, Aluminum, Gas to Petroleum Products etc. (These are major priorities of the Government)
Natural Gas Export by Pipelines a) Gas trade by Pipelines to Regional markets (Bahrain, Kuwait, Pakistan, Turkey and UAE) (Priority based on their Strategic and political value as indicated in the long term Energy planning of the Expediency Council) b) Gas Trade by Pipeline to China, Europe and India
Liquid Natural Gas (LNG) Trade
Berlin, Oct 29th 2009
The International Institute for Caspian Studies

7. Gas Requirements for all Existing and Planned Projects 2010-2030
Is There Enough Gas for all these Projects? Yes If gas resources are developed quickly No if gas resources are developed at current pace
Gas Requirements for all Existing and Planned Projects
SECTORS Trillion Cubic Meters
Total Domestic Consumption –6.0 (Electricity Generation included)
Total Injection in the Oil Fields –2.0 (Most of this gas will be recovered)
All types of Gas Based Industries –1.0
Export (Pipelines & LNG) –2.0 (Based on current export agreements and MOUs)
TOTAL –11 (Less than 40% of the current total reserves)
Berlin, Oct 29th 2009
The International Institute for Caspian Studies

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What are the Main Issues Influencing Iran’s Gas Policies and Development?
1- Job Opportunity and Expectation
2- The need for Gas Injection for Enhanced Oil Recovery
3- The high Gas Requirement for Domestic Market (Particularly in Winter)
4- Energy prices and Subsidies.
5- Lack of Comprehensive Energy Policy
6- Political Tension with the US
Berlin, Oct 29th 2009
The International Institute for Caspian Studies

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The Comparison of Natural Gas Transmission Costs – Pipeline & LNG (Slide from Iran’s Petroleum Ministry)
Berlin, Oct 29th 2009
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NABUCCO Pipeline
Potential Suppliers are;
Azerbaijan
Iran
Turkmenistan via Caspian Sea or Iran
The most Economic way for Turkmenistan to Participate in NABUCCO would be to have gas exchange with Iran. This will save around 3 Billion Dollars
Berlin, Oct 29th 2009
The International Institute for Caspian Studies

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Persia Pipeline The Superiority of the Persian Pipeline to the Nabucco Pipeline is that the route of the pipeline is through gas Consumer Countries (Customers) and not through Transit Countries
Turkey
Serbia
Czech
Austria
Switzerland
Greece
Poland
Iraq
Italy
Germany
France
Spain
Portugal
Iran
Romania
Hungary
Croatia
Bosnia
Bulgaria
Slovakia
England
Norway
Sweden
Finland
Holland
Denmark
Belgium
Macedonia
Albania
Assaluyeh
Mediterranean Sea
Black Sea
Caspian Sea
Persian Gulf
Cyprus
IGAT IX
Slide from Iran’s Petroleum Ministry
Berlin, Oct 29th 2009
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12. Persian Pipeline Specifications in Iran
The Pipeline is 1818 Kilometre
It Can carry 110 million Cubic Meters of Gas per Day
Yearly Export capacity is 35 Billion Cubic Meters
The Required Investment for this Pipeline is 6-7 Billion Dollars
Berlin, Oct 29th 2009
The International Institute for Caspian Studies

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Potential Gas Export Pipeline Route to Europe (Eastern Europe Via Turkey)
Length: 5600KM
Estimated Investment; Iran~ $7bn Total~ $18bn
The pipeline passes through; Turkey Bulgaria Romania Hungry Austria
Berlin, Oct 29th 2009
The International Institute for Caspian Studies

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Potential Gas Export Pipeline Route to Europe (Southern Europe Via Turkey)
Length: 6200KM
Estimated Investment; Iran ~ $7bn Total ~ $20bn
The pipeline passes through; Turkey Greece Italy Switzerland
Berlin, Oct 29th 2009
The International Institute for Caspian Studies

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Potential Gas Export Pipeline Route to Europe (South Europe Via Mediterranean Sea)
Length: 5700KM
Estimated Investment; Iran~ $2bn Total~ $25bn
The pipeline passes through; Iraq Syria Greece Italy
Berlin, Oct 29th 2009
The International Institute for Caspian Studies

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Main Points
Iran is by far the largest producer and consumer of gas and gas based products in the ME and the Region after Russia
The country is strategically located to benefit from regional and international trade. However domestic and international political and economic considerations has slowed down the development of Iranian gas industry and consequently it has deprived Iran from gaining its right place in the world gas business.
If Political and Structural Problems are solved, Iran could become the second largest producer of gas in the coming 15 years after Russia. It would be capable of meeting its domestic gas demand without interruption and have a good share of the world gas business.
There are several Routes for export of gas from Iran to Europe which includes passing through Turkey or via Iraq and Syria to Greece. Greece, as the nearest European country to Iran has a very important role to play in the coming years.
Persian Pipeline and Nabucco are currently the most likely scenarios
Nabucco is well Established but without Iranian Gas it may not be as successful as envisaged.
Persian Pipeline may have gas but it lacks the international backing and the Consortium needed
Berlin, Oct 29th 2009
The International Institute for Caspian Studies

17. The International Institute for Caspian Studies
Main Points (cont)
The main challenges for the implementation of these Pipelines are Structural, Financial and Political.
Adequate legislation in Iran as well as the Region is Needed.
Private Sector in Iran and all the Transit Countries must be given a role and encouraged to get involved in the gas business in general and the formation of the Consortium for Gas Export to Europe
Gas Producers must structure a meaningful long term Price Formula for Gas and Long Term Security of Supply
Consumers must give assurances of the Long Term Security for Demand and Security of Investment.
Transit Countries must be Financially involved to give Long Term Security of Transit
Berlin, Oct 29th 2009
The International Institute for Caspian Studies