Iran is seeking to build a $4 billion natural-gas pipeline, the Pars pipeline, to the European Union that may rival projects backed by the EU and Russia, said deputy oil minister Akbar Torkan.
Iran in talks with a “renowned European company” that may operate the so-called Pars Pipeline, Torkan said.
International sanctions have prevented Iran from drawing the technology and financing necessary to liquefy gas and export it via tankers as liquefied natural gas (LNG).
The Pars Pipeline is Iran's answer to the EU-backed Nabucco link and Gazprom's South Stream project, Torkan said.
Those projects are competing to supply western Europe with Caspian gas. He declined to provide a timeline, said a Bloomberg report.
Iran wants to pipe as much as 37 billion cubic metres of gas to Europe annually, about 20% more than either Nabucco or South Stream. Russia, which supplies about a quarter of Europe's gas needs, is planning to increase that share by building South Stream under the Black Sea and the Nord Stream link under the Baltic.
“We have no contract and no engagement with Nabucco,” Torkan said. “We have come up with a new route and will have new customers.”
From Iran, the Pars Pipeline will cross Turkey, passing on to Greece, Italy and onward to Switzerland, Austria and Germany, Torkan said. Eastern Europe will be completely avoided, he said, and all countries along the route will also buy Iranian gas.
Iran will tap its South Pars field to supply the Pars Pipeline.
European companies such as Shell, France's Total and Spain's Repsol have curbed LNG projects at South Pars because of the increased political risk of investing in Iran.
South Pars gas exports would be more cost-effective through a pipeline rather than as LNG, Torkan said.