Iran has the world’s second largest gas stocks, but couldn’t develop them because of the lack of necessary capital and this situation forced the state to buy necessary gas from neighboring countries. The situation is compounded by the fact that major natural gas deposits are located in the south of the country, while the big industrial cities of Iran are on its north. In this case, to transport natural gas accounted for a fairly large territory. In Iran itself the price of natural gas to the end-user is much lower than the cost of it. Iran subsidizes the price of gas from the state budget. In this case, Iran does not have the necessary capital to increase production of its own gas. Attempts to attract foreign capital to develop deposits is not possible because of the United States, since it has imposed sanctions, according to which no foreign company may invest in Iran’s economy in excess of $ 20 million.

For the same reason, the agreement between Iran and Turkey on the development of Iranian gas fields in the province of South Pars, may never take place. In addition, all parties have not yet been able to agree on many of the provisions of the future agreement. The fact that its deposits interested countries of the European Union that planned creation of an alternative to Russian infrastructure, i.e.Nabucco pipeline to transport gas from the countries of the Caspian Sea basin, but there are stil skepticisim about the future of this project and the role of Persian gas. The representative of the EU on energy policy formally stated that the EU does not need Iranian gas to fill the pipeline Nabucco. Apparently, the EU has shown solidarity in the matter with the United States.

The cold winter in the country has forced Iran on January 7, 2008 to cut the supply of gas to Turkey. One reason for the distruption of deliveries associated with the termination of gas exports from Turkmenistan. Most likely, Turkmenistan will review export prices.

It is noteworthy that Iran is not yet in force to undertake specific activities to address the problems associated with the development and acquisition of natural gas. Even the intended agreement with Azerbaijan on the possible import of gas from that country will not solve the problem completely, in this area. In this case, in the near future, Iran may face a severe crisis in the energy sector, which could spread to other sectors of the economy.

Turkey

When Iran reduced the supply of gas, Turkey has been in trouble. Immediately after that, Turkey appealed to Russia with a request to increase the supply of gas from Russia and the country went forward. In addition to ensuring Turkey’s own needs, temporarily suspended deliveries of Azerbaijani gas to Greece by mutual agreement. It is noteworthy that 50% of consumed energy in Turkey is natural gas. Furthermore, since Turkey does not have its own deposits of gas, the entire amount actually has to be imported. In this case, 60% of gas imports accounted for only on Russia.

Iran is not the first time suspends gas supplies to Turkey. Despite this, Turkey has not been taken substantial measures to ensure energy security of the country. But lately it was seen that problems in this context seriously concerned that country. After all, if it was able to receive gas from Russia to compensate the deficit in consumption, there is no guarantee that this will happen for the next time. In this respect, Turkey intends to diversify its gas imports. Specifically Turkey planned to increase the supply of gas from Azerbaijan. Turkey also is on the way to construct a pipeline for the gas from Egypt. Also, negotiations happen for the supply of liquefied natural gas from Qatar.

In addition, Turkey is planning to build a gas storage facility under Tuz Golu (Lake). So far, Turkey has only one natural gas storage in Silivri, the capacity of which suffers from the covering required number of gas, as it was during the suspension of gas supplies from Iran. Provided that it can be said that very soon Turkey will began the construction of the nuclear power plants and the development of atomic energy.

To be continued…

Rovshan Ibrahimov

rovsen@azerimail.net