Friday, August 22, 2014

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New Gas Pipeline will Connect Iran and Syria

On February 19th, Iraq gave its ‘ok’ for the construction of a natural gas pipeline across its territory connecting Iran to Syria. The Iraqi Cabinet said in a statement Tuesday evening that it has instructed the country’s oil minister Abdelkarim al-Luaybi to sign a framework agreement for the $10 billion project. The project is designed to supply gas from Assaluyeh, near the giant offshore South Pars field (the largest field in the world- shared with Qatar) to Syria as well as other export markets. The pipeline could also be extended to Lebanon and Europe in the future, according to energy experts.

The first 225 kilometres of the pipeline through Iraq will be completed in June 2013 according to preliminary estimations. The pipeline will connect the southern Iranian port of Assolouyeh to Iraq and then to Syria. It will have a 110 million cubic meter/day capacity. Around 20 million cubic meters of Iranian gas will be directed to three Iraqi power plants running on gas on a daily basis, with around 25 million cubic meters a day going to Syria.

Iran’s deputy oil minister, Javad Ouji, stated in July 2012, when Syria, Iran and Iraq signed the memorandum of understanding for the gas pipelines, that the project should take between 3 to 5 years to complete as long as the funding is secured.

Iran - that sits on the world’s second-largest natural gas reserves after Russia - is working on increasing gas production by focusing on domestic and foreign investments. Iran currently consumes all of its gas production, i.e. 21.8 trillion cubic feet per day, but plans to double its output and export 250 million cubic meters per day to its neighbouring countries and Europe starting 2015.

Under the current circumstances, Iranian gas is of course not allowed into the European market. It would be interesting to watch whether these sanctions will be dropped in the future. 

Karen Ayat is an analyst focused on energy geopolitics in the Eastern Mediterranean 

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