Monday, 25 July 2011

Iran signs $10 billion gas deal with Syria and Iraq

Iran on Monday signed a preliminary $10 billion deal with Syria and Iraq to export its natural gas, its latest effort to boost its energy sector that has been targeted by international sanctions.

Under the memorandum of understanding signed by the three countries’ oil ministers, a 5,000 kilometer (3,100 mile) pipeline will be built to carry gas from the giant South Pars field that Iran shares with Qatar. The gas would move through Iraq, Syria and Lebanon, to the Mediterranean, with Europe targeted as the final export destination, according to state television and the Oil Ministry’s web site, Shana.

The deal would also supply gas to Syria, which lacks the kind of oil and gas resources of Iran and Iraq — two key OPEC members.

Deputy Oil Minister Javad Owji was quoted by state television as saying that the pipeline would take three to five years to build. A search for a contractor and financier would begin after the signing of the MOU, Owji, who also serves as the managing director of the National Iranian Gas Company, was quoted as saying by Shana.

Owji said South Pars has sufficient gas reserves for 250 million cubic meters per day of exports for the next 80 years.

Iran is under international sanctions over its controversial nuclear program, and those measures have kept many of the major international oil giants at arms length, leery of investments despite Iran’s abundant oil and gas reserves.

The country is OPEC’s second largest oil exporter, and sits atop 137 billion barrels of conventional crude oil. It also holds the world’s second largest natural gas reserves — roughly 28 trillion cubic meters.

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