Wednesday Dec 12, 2018

PetroEnergy Information Network

Saturday / 10/6/2018 12:00:00 AM / 19:33
Service : Gas
News Id : 284995
Reporter : 763

US Sanctions Strengthen Iran-Russia Gas Relations: NIGC

(Saturday, October 6, 2018) 19:33

TEHRAN (Shana) -- Iran’s deputy petroleum minister for gas affairs said the United States’ stance towards Tehran would bolster the alliance between Iran and Russia, saying Iran had several methods to deal with the sanctions at its disposal, and Russia had firmly stated it would continue investing in Iran.

Speaking to the Sputnik News in Moscow, Hamid Reza Araghi, who is also head of the National Iranian Gas Company (NIGC), touched on the potential challenges and outlook of the impact of US sanctions against Iran’s oil industry, saying, “Trump’s threats and the US stance against Tehran and Moscow sets the ground for the development of energy cooperation between Iran and Russia.”

The following is an excerpt from Mr. Araghi’s interview with Sputnik.

Sputnik: What is your opinion about Iran-Russia cooperation in the gas industry? Are the main projects on the agenda now? 

Iran and Russia sit atop the world’s largest gas reserves. According to BP annual figures, Russia is placed first in the world for having 35 trillion cubic meters of natural gas in its reserves in some years, while in some other years, Iran takes its place for 34 trillion cubic meters of gas in its reserves. Naturally, the existence of these two large gas reservoirs does not cause our countries to compete in the gas sector. This led to the formation of the Gas Exporting Countries Forum(GECF), which is sometimes mistakenly called the Gas OPEC, which is not right, because the forum does not affect gas pricing. The body was an introduction to the prospects for gas, natural gas development, consumption and production, as well as strategies in the world in the coming years.

The cooperation between Iran and Russia, and formation of GECF, led to an information concentration in the world, and a forum on the future of gas in 2030 was set up during the Russian Energy Week.

GECF does not step in political issues; its strategy focuses on providing counseling to the world, receiving information, taking into account the sources of production and consumption, and ultimately providing information to its members in order to understand the gas map in the future and recognize what moves they will have to make in the future in the gas industry; and what should the world do to maximize benefitting from natural gas. Therefore, GECF cannot play any role in bolstering Trump’s pressure.

In one of the special sessions of the "Russian Energy Week" conference, some serious topics were raised on the future of gas. GECF figures show that by the year 2040, gas and energy consumption will increase, but the trend in energy consumption shows that oil will not see much growth and its consumption stays constant and its consumption will be replaced by natural gas and the renewable energies.

According to the GECF, by 2030, gas development and consumption will be higher than other energy resources, and will have the highest consumption in the future in China and India.

The experience of gas supply to cities and villages and exports requires cooperation between Iran and Russia in the fields of maintenance, implementation of transmission pipelines, gas exports and, in general, gas industry technology. Previously, the standards of the National Iranian Gas Company were based on the API (American Petroleum Institute) standards, but after the Islamic Revolution, a series of changes occurred.

In 2016, Iran signed a memorandum of understanding with Russia's Gazprom, based on which, the two sides agreed to work in five committees.

Iran has made significant progress in the field of CNG and conversion of fuel to gas. Today, in Iran, automobiles consume roughly 20 million cubic meters of CNG per day. Representatives of Gazprom have travelled to Iran to visit factories producing gas tanks and nozzles, and are about to ink MoUs in this regard with Iranian partners.

Speaking of technologies, implementation of gas pipelines, smart packages over the past five years between Iranian and Russian companies in the field of research on mercaptan production, which is now being presented as a technical knowledge in Assaluyeh and, thankfully, today, mercaptan is being produced in Iran. This technology is only available in France, Russia, Iran and maybe one more country.

Regarding gas turbines, we have held talks with a Russian company. In Russia, they have been able to commercialize this technology. Negotiations have taken place between Iran’s OTC and Russian companies, as well as the issue of smart pigging.

In sum, Iran and Russia know what to do under the current circumstances…We have good prospects for cooperation. The five committees that were set up between Iran and Gazprom met in Tehran and drew up minutes. Committees and their members were identified, and now there is a relationship between the two countries in terms of technology transfer. Gazprom is interested in investing in Iran's oil and gas sector.

The political relationship that exists between Iran and Russia will also be firmer day by day. The United States' stance toward Iran and Russia helped to unite the two countries better and they have been able to work together on a wide range of sectors including banking, oil, executive and technology grounds.

Usually, MoUs entail a section on return on investment. Russia is also seeking to ensure return on its investment in Iran. It strikes an agreement with its Iranian partners of the Iranian government, a great project between the two countries will be launched.

Sputnik: Will the new Trump sanctions affect implementation of joint Iranian-Russian projects and cooperation between the two countries?

For nearly 40 years, the United States has been imposing sanctions on us. These sanctions have a political and a cultural dimension. Sometimes, US efforts against Iran are intensified and, like under President Obama, become milder. We have become accustomed to such behavior. About eight to 10 years ago, not only the United States, but also the UN boycotted us, but, thankfully, these sanctions were lifted. After the Joint Comprehensive Plan of Action (JCPOA), things changed. The whole world witnessed that it was the US that pulled out of the deal and imposed one-way sanctions.

We have an proverb in Persian which says: "You cause trouble for yourself and waste our energy by your troublemaking.” This is what the US has done which defames itself by such doing while causing troubles for Iran. For example, Total chairman announced that since they had invested in the whole world, now their interest were as stake to stay in Iran. So, this caused trouble for us, too, because some countries may choose not to invest in Iran.

But we have alternative methods, of course, which were not confirmed by Mr. Putin. He said Russia would invest in Iran and had a solid stance on it.

Today, all three countries of Iran, Russia and Turkey are targeted by sanctions; we will find solutions. The United States cannot boycott everything.

On the other hand, Europe is not happy with the status quo, and is trying to find solutions. This is shameful for Europe, whose people ask, “are you employees of Trump?!”

It is a very important point which has caused a headache for Europe.

The United States has been implementing any sanctions that it intends to impose. It has ordered all the banks, insurers, airlines, ect. to boycott Iran… but we are a deep-seated thousand-year-old civilization, and I think that with the help of the government, the leadership and the people of Iran, these threats will turn into an opportunity, and we will see the prosperity of the country. Undoubtedly, these conditions will increase the cooperation between Iran and Russia.

Sputnik: Is Iran, under pressure from the United States, ready to eliminate the dollar in gas deals with its partners?

Since in the world economy, the dollar belongs to the US, and any bank working with this currency does not have permission to operate this currency (since all of these are in line with the instructions of the central bank of the United States), we carry out dollar-based deals with other currencies. But, there is an important issue regarding why Trump will never be able to boycott the Iranian gas sector.

Gas is environment-friendly, and unlike oil, it's not just a commodity for trading so that it can be easily targeted by the US boycotts. Wherever gas is consumed, it means that such fuel as diesel, gasoline, etc. are no longer used. Now the IGU, an international body, advises all countries to distance themselves from other fuels and consume to natural gas.

Therefore, if Trump decides to impose sanctions on the gas sector, then it will be a problem for the whole world, because countries have to consume other fuels instead of gas and pollute the air.

That is why Mr. Erdogan says that we (the Turkish government) are working for the people and are not subject to anyone and that the gas they receive from Iran is for the environment and the welfare of the people and that we cannot abide by any sanctions.

Since we have a lot of options in relation to gas consumption in Iran, gas exports are not necessarily vital to us, and we can do a variety of things with gas. First, we can save gas. Second, we can pump it into oil wells. Third, we can consume gas in our industries.

Our country is one of the rarest countries where 100% of the urban population and 95% of its rural population benefit from gas. According to statistics, over the past five years, we have been able to supply gas to 14,000 villages. There are a number of other villages in Iran that will be provided with natural gas this year or the next year.

Countries that receive gas from us regard it as an essential fuel, because if they do not receive gas from us, they should refer to other fuels, which is both too expensive for them, and pollute the environment.


Email is required
Characters left: 500
Comment is required