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Some $35 billion of investment has already been committed to developing the South Pars gas field which is due to produce 28 billion cubic-feet-a-day of gas rising to 100 billion cft. The giant field, lies 100 kilometres offshore south west Iran
It seems inevitable that Iranian gas will play a pivotal role in global supplies. Iranian gas would meet part of the European Union's energy diversification strategy. Russia currently provides 25 per cent of EU gas consumption.
Supply interruptions
Confidence was badly shaken when Russia's Gazprom turned off the tap in January to Ukraine a country through which European supplies flow. The northern hemisphere is especially vulnerable to interruptions to global energy supplies and increasingly so amid growing global competition for oil and gas.
Iranian gas is already part of plans by a private consortium to source gas from Middle East and Caspian producers for a proposed gas pipeline terminal. The so-called Nabucco European consortium, led by Austria's OMV, has plans to buy from Azerbaijan, Egypt as well as Iran.
The consortium has plans to build an EU 4.6 billion pipe line from the Turkish-Iranian border to Baumgarten in Austria. Reports have suggested the EU importing up to 10 billion cubic metres of gas a year from Iran by 2011.
Iran, India and Pakistan also held their first tri-partite meeting in Tehran earlier in 2006 to discuss pricing formulas on a 2,135 kilometre gas pipeline project linking their countries with some suggesting it could be extended to China eventually.
Pakistan pipeline
Pakistan has decided to give special status to the proposed Iran-India-Pakistan gas pipeline. Decisions need to be in the next 12 months for the pipeline to be ready by 2010. Another tri-partite meeting is due to be held in Islamabad shortly.
The US has cautioned that if the pipeline goes ahead it could invoke the Iran and Libya Sanctions act which imposes sanctions on non-US companies investing in oil and gas business valued at more than $20 million or more in Iran.
However, it may be commercial wrangles as much as politics that delays the venture with suggestions that Tehran is asking for premium rates over current market levels for future gas supplies.
While the US opposes any developments that would develop Iranian influence on global energy needs there are those in Iran as well who oppose increasing the export of the nation's gas. The gas, it is argued, could be used more usefully domestically and also be re-injected into oil fields to sustain and enhance output.
