The CEO of the National Iranian Gas Company said Iran seeks gas exports to Europe, adding: The future atmosphere of the countries, the type of cooperation and the events that take place in the country's diplomatic relations affect the issue of gas trade.
Iran's gas exports to neighboring countries has gone through a lot this year: from explosion of the Iranian gas export pipeline to Turkey and its three-month suspension, the issues related to the extension of the contract with this country to the announcement of the verdict of the dispute between the National Iranian Gas Company and Türkmengaz and the reduction of gas exports to Iraq.
Gas exports to Pakistan and Afghanistan have also been considered by the media in recent months. Now, the CEO of the National Iranian Gas Company (NIGC) has underscored the latest developments in Iran's gas exports and stressed that Iran is following the prospect of gas exports to Europe by carefully examining market developments.
Read the full version of Shana's exclusive interview with Hassan Montazer Torbati, CEO of the National Iranian Gas Company.
Shana: Mr. Torbati! Tell us about the extension of the gas contract with Turkey. The Iranian Minister of Petroleum said that the next administration would have time to extend it. What is the current state of negotiations?
What Mr. Zangeneh said is because our contract will last for a few more years, and it is natural that discussion of these issues will get hotter as we approach the end of the contract, but this issue has not been idle and we have raised our issues and Turkey has raised some issues.
The fact is that the Turkish gas trade environment has changed from the previous contract, meaning that their private sector is entering the gas distribution sector, which diminishes the role of their government, so we must prepare our contract model for the future Turkish environment in accordance with their market. We may supply some of our gas on a short-term or seasonal basis, while the Turkish market does most of its purchases as a single shipment and does not pursue all of them in the form of long-term contracts.
Therefore, while we are pursuing the issue with Turkey in the form of the current agreement and we hope that our negotiations will increase, we are also conducting studies to be ready for the future of Turkey and maintain or augment our share in the Turkish market whether through the government or through the private sector.
Shana: So there might be certain amendments to the contract?
Both we and the private sector may have different types of contracts depending on the future of Turkey and it may not be in the form of a single contract.
Shana: So will there be gas trade with Turkey?
We must pursue gas trade as one of the main issues, and Turkey is one of the good routes for gas trade. Turkey wants to have different sources of gas supply and will not depend on one country; naturally, it supplies part of its market from Iran, which is in the interest of both Turkey and Iran. On the other hand, Turkey is a good route for gas trade with Europe in the future.
Shana: Is that to say the National Iranian Gas Company is pursuing the prospect of gas trade with Europe?
Yes. The issue of gas trade is affected by other political and international issues, and in any case, the future atmosphere of the countries, the type of cooperation and the events that take place in the country's diplomatic relations affect gas trade.
Shana: You recently announced that a plan to export gas to Afghanistan is ready. What stage is this project in now? What negotiations have been held for it?
So far, meetings have been held on this issue. We had a meeting with Afghan officials three weeks ago and we are looking to be able to get government guarantees from the Afghan government and involve the private sector as much as we can. Because it is better to involve the private sector in developing work in Afghanistan; the work is going in the right direction and I think the preparations are well done; there is no need to worry about it.
The follow-up groups have promised that we would be able to reach an initial agreement and memorandum in the next few months. However, there is no basis for this in Afghanistan; the difference with other countries is that there is no market for gas consumption and we have to create a market there in parallel with the contracts we sign, and therefore the work is a bit different than exporting gas to other countries.
Our forecast is to pursue the supply of compressed natural gas (CNG) in Afghanistan as well. These are different areas that because this country is not a gas consumer now, both sides should work together; Iran should develop gas pipelines to the border, and in parallel, we should be able to create gas consumption in the Afghan market.
Shana: So the implementation of this plan is a long-term plan.
Yes. Although the amount of exports will be small at first, but this market will grow over time.
Shana: The Ministry of Petroleum recently announced that Iran could have sued Pakistan under its gas agreement, but refused to do so due to the principle of good neighborliness. Iran says it is trying to resolve the issue through dialogue. Has there been a change in the process of gas exports to Pakistan?
We are still hopeful and I do not think we should lose the Pakistani market so soon and be disappointed. Pakistan needs gas and Iran has provided the infrastructure, so it is best to continue to pursue this issue.
God willing, Pakistan will soon be able to provide the conditions for receiving gas inside its borders, because it will be good for the country's economy in the long run, but because it needs initial capital in the short term, it has become difficult for them. In my opinion, the best thing to do is to keep this contract in the same condition and wait for it to start.
Shana: What is the current state of gas exports to Iraq? Has this country paid its dues to Iran?
According to the agreements reached by the Central Bank in meetings with the Iraqi side, we have also slightly increased the amount of gas shipments to this country, because hopes have been created for having Iran's claims settled and now about 15 to 20 million cubic meters of gas is being exported to Iraq.
Shana: What was this amount before?
In the summer, about 40 to 45 million cubic meters per day were exported to Iraq.
Shana: You recently stressed that gas trade with Turkmenistan was still on Iran's agenda; is it possible to sign a new trade agreement with this country by the end of the twelfth administration?
This does not depend on the current administration or the next one, because the policy of the whole country is to have trade relations with Turkmenistan, and this has always been the case. Iran's gas contract with Turkmenistan has been referred to an arbitration, which has reached conclusions and a ruling has been issued. Now we have to see what Turkmenistan's plan is to develop gas trade relations with Iran.
Shana: Therefore, Iran is ready for gas trade with Turkmenistan.
Yes, we are ready. Although we have eliminated our internal dependence on Turkmenistan, we strongly seek to establish a gas trade with this country, because it is in the interest of both Iran and Turkmenistan. We are two neighboring countries that have good opportunities for developing trade relations.