In the latest Persian pipeline proposal, Nozari said Iran would transfer gas to Greece and Italy through Iraq, Syria and the Mediterranean, according to Press TV.
The project would almost certainly face competitive challenges from the U.S. and EU-backed prospective Nabucco pipeline that would pump Caspian gas to Europe bypassing Russia. Two other projects — the TGI, the Turkey-Greece-Italy pipeline and the Trans-Adriatic pipeline, which also bypass Russia — are also competitors and all those projects would be vying for the same supplies of gas, including from the Shah Deniz project in Azerbaijan.
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In large part, Iran's problems are linked to its need for foreign investment and its struggles with declining oil production in its aging fields. Many of those fields require extensive re-injection of natural gas to sustain well pressure and keep the crude flowing.
At a recent energy seminar in Vienna, Nozari acknowledged that Iran is diverting funds from other sectors of its national budget to maintain oil output at over 4 million barrels a day.
The comment was a clear reference to the country's discomfort with current oil prices, which are about one-third of their mid-July highs of $147 per barrel. But they point to the broader challenges Iran faces: It needs foreign money and expertise — two things it has little access to because of sanctions.
The Iranians "have been facing rising costs," said Samuel Ciszuk, Middle East energy analyst with IHS Global Insight in London. "On top of that is: Iran is coming into a position where it needs very large investments in its oil industry."
Earlier in March, Tehran announced that it had signed a $3.2 billion gas deal with a Chinese-led consortium to produce more than 10 million tons of liquid natural gas over the next 36 months. Iran and Russia also announced a gas swap arrangement in which Russia's Gazprom would deliver gas to northern Iran in exchange for gas deliveries from southern Iran.
The China deal that involves Phase 12 of the massive South Pars gas field is perhaps the most high profile of the ventures. Iran previously said the project would be exclusively for Iranian firms but later opened up the project, an indication of its cash crunch.
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In signing deals with little or no immediate cash outlay requirement, Russia and China, get a toehold in Iran in projects they normally would find themselves too small for. That could give them an advantage when or if sanctions are eased.
The overtures appear to be part of an effort to pressure Western firms. But they're not biting.
French oil giant Total S.A.'s chief executive, Christophe de Margerie, said Thursday in Paris that he doubted talks between the company and Iran over developing the massive South Pars gas fields would ever succeed.
Iran last month rebuked Total, saying it was succumbing to U.S. pressure and "procrastinating" on Phase 11 of the project. Tehran said a new partner would be brought on, but days later said Total was still involved in the project.
"On the Iranian part, they're trying essentially to make companies commit, and they tried various things to do that, including looking to other partners or saying that companies will lose their position if they don't commit," said PFC Energy's Tsafos. "This, at least so far, hasn't quite succeeded in making anyone say, 'OK, we're going to go ahead now.'"