(MENAFN- Arab Times) Iran's plans to export natural gas to Iraq have been pushed back indefinitely, an Iranian official was quoted as saying on Saturday, blaming the poor security situation in Iraq for the delay. The oil-producing neighbours signed an agreement in 2013 under which Iran would start exporting gas to Iraq to feed three power plants in Baghdad and Diyala. But two years later, exports have still not begun. "The lack of security and presence of Daesh (Islamic State) is behind the delay of gas exports to Iraq," Ali-Reza Kameli, head of the National Iranian Gas Exports Company, was quoted as saying by Shana, a news agency linked to Iran's Oil Ministry.
When asked when exports might begin, he replied: "That depends on the security situation in Iraq." In March Kameli said exports to Iraq could begin in May if security conditions improved. Iran first announced a delay in September last year, shortly after Islamic State militants took control of large swathes of Iraqi territory. Iran has huge gas reserves and exports small quantities to Turkey, but production has failed to keep pace with high domestic consumption.
Northern Iran relies heavily on gas imports from Turkmenistan, especially for heating in winter. Tehran is in talks with six world powers to curb its nuclear programme in exchange for relief from international sanctions, which could open up Iran's energy sector to foreign investment within a year. Iraq, which like Iran is a major oil producer and member of the Organization of the Petroleum Exporting Countries (OPEC), has struggled to attract foreign investment to develop its gas industry and suffers severe power shortages.
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MOSCOW: Russia's top natural gas producer, Gazprom, may take part in liquefied natural gas projects in Iran once sanctions against Tehran are lifted, Gazprom's deputy Chief Executive Officer Alexander Medvedev said. "Gazprom does not rule out its participation in these projects under certain conditions," Medvedev told reporters. "The sanctions should be lifted first." Russia has stepped up efforts to strengthen ties with Iran and announced an oil-forgoods programme in which the Islamic Republic would export up to 500,000 barrels of oil per day to Russia in exchange for goods, including grain.
Iran and six countries, including Russia, reached an interim agreement in early April and are working towards a final deal by the end of this month that could see sanctions lifted. An abundance of condensate and natural gas liquids in Iran make Iranian LNG export projects potentially highly competitive, even as supply swells due to US shale gas and big finds off East Africa. Experts say, however, that it would take a decade or more for Iran to became a major LNG exporter. Gazprom was involved in developing Iran's South Pars gas project, but its participation was stalled because of sanctions.
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