TEHRAN: Much of the focus on the impending opening up of Iran has been on what this means for the oil industry. However, even bigger shockwaves could be felt in the natural gas sector, should economic sanctions restricting the Persian Gulf powerhouse be fully lifted.
Tehran’s reintroduction to the international community would fire the starting pistol on a natural gas race that could have profound long-term implications for international oil companies such as Royal Dutch Shell, which have ploughed billions of dollars into developing higher-cost gas projects in areas such as Australia.
Iran shares access to the world’s single largest natural gas field with Qatar but has so far been unable to fully develop its share of this vast resource. The South Pars field is thought to hold at least 325 trillion cubic feet of natural gas, enough to supply all of Europe’s needs for the next 16 years.
Prior to the imposition of tougher economic sanctions on Iran, the country had made progress in tapping into South Pars, which had been broken down into 24 phases of development. The Iranians were able to move ahead with early phases intended to provide energy for the country’s domestic market but more lucrative plans to export liquefied natural gas (LNG) have been delayed.
Iran had signed deals with international oil companies to develop LNG projects under a five-year plan that had envisaged exporting 70m tonnes of the fuel each year. However, many of these deals were cancelled, setting back Iran’s gas industry by decades as its big rival Qatar pressed ahead with its own developments on the other side of the Gulf.
