Brussels, 14/09/2015 (Agence Europe) - Following the nuclear programme agreement that was tied up with Iran this summer, the European Commission is starting to make moves to encourage the purchase of Iranian gas by European companies and to make Iran an important EU supplier, once the sanctions on Tehran have been lifted, US newspaper Wall Street Journal reports on Monday 14 September.
The Commission believes that once the international embargo has been lifted, the EU could import 25-35 billion cubic metres of Iranian gas by 2030, according to the Community and industry sources mentioned by the Wall Street Journal. This would put future supplies of Iranian gas at the same level as current imports from North Africa, and would help reduce the EU's dependence on Russia - which sends 130 cubic metres to the European market per year.
European Commissioner for Climate Action and Energy Miguel Arias Canete addressed the issue of the outlook of trade in energy with Iran during a working lunch on 4 September with representatives from the large European energy groups - including RWE, E.ON, BP, Royal Dutch Shell, Repsol, Total, Engie and Statoil. Like the EU governments, European energy companies are beginning to position themselves with a view to exploiting the rich Iranian reserves in hydrocarbons when the sanctions have been lifted. “We want our companies to get there and invest big time… before the Americans and Chinese”, a Community source stated, as quoted by the Wall Street Journal. A source from one of the energy groups represented confirms on his side that the meeting on 4 September was intended to encourage the European companies to pursue their links with Iran actively.
Tehran must now implement the nuclear agreement concluded in July. This is not expected to happen before the start of 2016. Until then, the sanctions that prevent European energy companies from doing business in Iran will remain in place and will limit the ability of European companies to strengthen links.
While it confirms that the European outlook for trade in energy with Iran was one of the subjects addressed at the meeting of 4 September, the Commission states that it is not rushing into formal arrangements and that it will assess the possibility of a high level energy dialogue with Iran “when the conditions are right”.
Backstage, work is picking up pace. According to an initial assessment made by the Commission, the largest part of the 35 billion cubic metres that would be sent to Europe would be in the form of liquefied natural gas (LNG) via Spain (which has the biggest capacity for importing LNG). This volume would apparently be included in the Commission's LNG strategy, which is due to be published in early 2016. This means that the EU would not in the short term seek to link Iran to the southern gas corridor project, which aims to channel gas from Azerbaijan and Central Asia to the European market by 2020.
The management of Iranian gas company National Iranian Gas Export suggested in the spring that Iran could sell nearly 30 billion cubic metres within a target of 5 years, not 15, as envisaged by the Commission. European companies, for their part, are waiting to see the changes Iran will make to ease the previously restrictive conditions offered to foreign energy companies. During an investors' conference in London in December, Iran announced that it would unveil new contracts to boost production and encourage joint ventures, the Wall Street Journal states.
On the diplomatic level, High Representative of the EU for Foreign Affairs and Security Policy Federica Mogherini has said that she wants to open an EU mission in Tehran, once the nuclear programme agreement has been fully implemented next year. (Emmanuel Hagry)