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    Middle East
     Jun 7, 2012


SPEAKING FREELY
Iran's Islamic pipeline a mad man's dream
By Mansour Kashfi

Speaking Freely is an Asia Times Online feature that allows guest writers to have their say. Please click here if you are interested in contributing.

The Islamic Republic of Iran, after encountering frequent disqualification in its efforts to be a reliable partner in the international arena, specifically in oil, gas and pipeline transactions, is now entering a fresh game in delivering natural gas to Europe, in spite of the heavy sanctions imposed by the United Nations, United States, and European Union.

Only this time around it is trying to team up with the Islamic Arab states, bypassing its old trade partner Turkey. However, the ultimate goal still is the same - delivering Iranian natural gas via

 

pipeline to Europe, a dream that has frequent failing records.

A memorandum of understanding was signed between the Iran and Turkey in July 2007 to transfer Iranian and Turkmen gas to Europe via Turkey. At that time the Iranian minister of petroleum, Qolamhosein Nozari, told reporters that "deliberations would be held in the coming weeks on management of the South Pars natural gas region and transportation of Iranian gas to Europe via Turkey."

According to the accord, Turkey would have produced 20.5 billion cubic meters (bcm) of natural gas in the South Pars gas field with an investment of US$3.5 billion.

Later, Akbar Turkan, head of Oil Ministry Planning, in October 2008 told the ministry website Shana that Iran plans to build a "Persian Pipeline" for shipping its natural gas through Turkey to Europe that would be independent of the proposed EU-backed Nabucco Project.

However, none of the aforementioned aspirations materialized; instead, within the last couple of years, the international pressures on Iran have tremendously increased. Japan, South Korea, Canada, and Australia have joined the US and EU collectively to enforce smart and effective sanctions on Iran. Further, the dawn of the Arab Spring has begun to shape the geopolitics of the region.

And Turkey, which has considered itself a close strategic partner with Iran in controlling the Kurdish uprising for the past three decades, is now breaking away and getting closer to its big brother in the form of the North Atlantic Treaty Organization (NATO), as well as seeking membership in the European Union. As recently as September 1 last year, the Turkish government ceased its opposition toward the deployment of an early warning radar system against Iran, advocated by the US and approved by NATO in a summit in Lisbon.

The resulting divergence between a Sunni Turkey and a Shia Iran has crystallized in their attitude and behavior toward the Syrian crisis. At one end of the spectrum is Iran, a very dear friend and advocate of Bashar al-Assad, the troubled Syrian dictator. At the opposite end is Turkey, which condemns Assad for murdering his own people. All these new developments between Iran and Turkey have manifested in the form of frequent explosions of the gas pipeline that carries Iranian natural gas to Turkey.

Despite all of this, and still believing it is in the game, Iran has a new plan for transporting natural gas to Europe. On July 24, 2011, Javad Owji, deputy oil minister and chairman of the Iranian National Gas Co, told the local media that "Iran's gas exports to Europe are sustainable and enjoy a secure future."

He continued that Iran has the capability to produce 600 million cubic meters (mcm) of gas daily, and by launching the South Pars gas field and completing the 24 projected phases in the future, Iran will be able to produce 1.2 bcm and to export up to 250 mcm daily. The following day a memorandum of understanding was signed between the deputy Iranian oil minister, Iraqi Oil Minister Abdul Kareem Luaibi, and Syrian Oil Minister Sufian Alao in the southern Iranian port of Assalouyeh, Iran's gas hub, for the construction of a pipeline dubbed as the "Islamic Gas Pipeline" to deliver Iran's natural gas to Lebanon after passing through Iraq and Syria, and then submerging beneath the Mediterranean before surfacing in Greece, the EU's first transit country.

Owji emphasized that the construction of this pipeline stretching for several thousand kilometers will take three to five years once an investment "around $10 billion" is secured. He further added that this agreement is indicative that the West's sanctions on Iran have been totally ineffective.

Iranian Mehr News Agency, on August 10, 2011, reported that Owji told reporters in Tehran: "Seven international investors have announced their readiness to finance, design, and construct the Islamic pipeline that will transport 110 million cm of Iranian natural gas to Iraq, Syria, Lebanon, and European countries per day." Owji added that talks were underway to begin construction of the multibillion-dollar project by March 2012.

Incredibly, Iran has a tendency to forget that the country has been subject not only to sanctions by the UN and EU but also to very effective US sanctions since the Islamic revolution of 1979, placing Iran directly in confrontation with Washington, a situation created by the takeover of the US Embassy in Tehran.

Although the authorities in Iran have continuously maintained that the US-led sanctions have not caused even a dent on their economy, the fact is the effect of sanctions has been extremely noticeable in the Iranian oil and gas industry, where the lack of Western investment and modern technology have extremely dampened Iran's ability to increase oil and gas output.

Western - noticeably American and recently European - sanctions against Iran have been closing in from all different angles, the most detrimental of which was the Baku-Tbilisi-Ceyhan (BTC) pipeline, which was prohibited from entering Iran. Carrying about one million barrels of Azeri crude oil per day to the Turkish-Mediterranean terminal via Georgia, this pipeline was originally intended to pump from northern Iran to a port in the Persian Gulf passing through Iranian soil. However, Iran was deprived of this privilege due to the existence of a totalitarian regime in Iran, which led the West, the pipeline sponsor, to change the route of the pipeline.

Next, the well-publicized Nabucco natural gas pipeline is being designed to carry natural gas from the Central Asia and Caspian regions to the lucrative markets of Europe, traversing the Republic of Azerbaijan, Georgia, Turkey, Bulgaria, Hungary, Romania and entering Austria. Once again, however, due to the suppressive and irresponsible regime in Tehran, Iran and its huge volume of gas was intentionally excluded from the project.

Furthermore, there is the demise of the grandiosely named "Peace Gas Pipeline". Iran, in close proximity to India, is already a major oil supplier to India and has the potential to be a gas exporter to that country as well. Iran had offered to sell gas to India at the Iran-Pakistani border. The 2,600 km pipeline was to carry gas from the "Assalouyeh Energy Zone" in southern Iran to Pakistan and India and was first mooted in 1994.

The proposed pipeline would have initially carried 60 million cm of gas a day from the Iranian South Pars gas field to split equally between Pakistan and India - and makes perfect economic sense. Given the huge gas reserves of Iran for many years to come, such a project would have provided reassurance of excellent income for the country for the foreseeable future.

The pipeline, however, was a target of US opposition. The George W Bush administration feared that the plan would direct precious new revenues into the Iranian economy, potentially weakening efforts to isolate Iran and its clandestine nuclear weapons program. Therefore, Nicholas Burns, the former undersecretary of state for political affairs and the US negotiator for the controversial nuclear deal with India, forbade India from concluding any long-term oil and gas agreement with Iran or face the prospect that the Indian nuclear deal with Washington would go into cold storage.

Ostensibly, the democratic world is not permitting a medieval regime, however rich in oil and gas, whose mission is to destroy civilized society, to be a regional economic player. Therefore, the materialization of a $10 billion investment in a 5,600 km Islamic pipeline from Iran with a despised and precarious government, to Iraq with a myriad of rival ideological factions, to Syria-assuming Bashar al Assad survives his people's uprising-and finally to Lebanon, a fragile state at best, would be a mad man's dream.

Mansour Kashfi, PhD, is president of Kashex International Petroleum Consulting, Dallas, Texas and the author of more than 100 articles about petroleum geology worldwide. mkashfi@tx.rr.com

(Copyright 2012 Mansour Kashfi.)

Speaking Freely is an Asia Times Online feature that allows guest writers to have their say. Please click here if you are interested in contributing.





US hard line in Iran talks driven by Israel (May 30, '12)

Desperately in search of compromise (May 26, '12)

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