Islamic Republic’s natural gas bonanza

Last year Tehran signed a contract worth US$6.9 billion with China National Petroleum Company (CNPC) and Shanghai Zhenhua Heavy Industry (ZPMC) for development, engineering and construction of offshore gas field in South Pars. This gas field alone is estimated to have reserves of about 14 trillion cubic meters of gas or 8% of world’s gas reserves.

The Paris-based International Energy Agency (IEA) and US-based Energy Information Administration (EIA) have predicted that by 2030, the natural gas will replace oil as the main energy source of choice for the industrial and public needs. This was one of the reasons the Bush administration used 9/11 to implement a preplaned agenda to occupy Afghanistan to reach the Caspian Sea oil and gas reserves. The plan was to run a pipeline network from Turkmenistan (whose oil fields are owned by an Israeli billionaire) through Afghanistan and ending at Balochistani port of Gwadar (Pakistan) from where it was to be shipped to Israeli refinery at Haifa through tankers.

According to Dr. Raja Muhammad Khan – Balochistan region is “fast becoming the hub of hydrocarbons. All overland oil and gas pipelines from Central Asia and the Middle East to China or elsewhere in Asia would be passing through this region, which may not be liked by the foes of Pakistan and Iran”. The intelligence agencies from India, Afghanistan, the US, UK and Israel have been quite active to become the region heaven for the foreign-supported terrorism. Jundoallah millitant outfit is one of such foreign-funded and trained groups.

On March 18, 2010 – Finian Cunningham wrote in Global Research that within the Middle East, Iran is the undisputed top holder of gas reserves. Its South Pars gas field is world’s largest. If converted to barrel-of-oil equivalents, Iran’s South Fars would dwarf the reserves of Saudi Arabia’s giant Ghawar oilfield. The later is world’s largest oilfield and since it came into operation in 1948, Ghawar has effectively been world’ beating heart for raw energy supply. In the soon to come era of natural gas dominance over oil, Iran will oust Saudi Arabia as the beating heart for energy.

“Both Europe and China stand to be arterial routes for Iranian and Central Asian gas generally. Already, the infrastructure is shaping up to reflect this. The Nabucco pipeline is planned to supply gas from Iran (and Azerbaijan) via Turkey and Bulgaria all the way to Western Europe (signaling an end to Russian dominance). Iran also exports gas via pipelines separately to Turkey and Armenia and it is also following up export deals with other Gulf countries, including the United Arab Emirates and Oman. Another major arterial route is the so-called peace pipeline from Iran to Pakistan and on to India, through which Iran will export this fuel to two of the region’s most populous countries. But perhaps the most tantalizing prospect for Iran is the 1,865-kilometre pipeline that supplies natural gas from Turkmenistan through Uzbekistan and Kazakhstan into China and is due to operate at full capacity in 2012. Turkmenistan shares a 300-kilometre border with Iran to its south and already has a gas export deal with Tehran. If the Iranian-Chinese South Pars gas field development can be incorporated into the above transnational pipelines that would confirm Iran as the beating heart of a world economy in which gas is the primary energy source.”

In this context of a major realignment in the world’s energy economy – one where there will be a continuing diminished role for the US – Washington’s blustering rhetoric about democracy and peace and war on terror or alleged Iranian nuclear weapons can be seen as a desperate attempt to conceal its fear that it stands to be a big loser. Encircling Iran with wars and threatening gas supplies to possibly the world’s top future gas customer – China – is the real deal. US actions are more accurately seen as putting a knife to the energy arteries of a world economy that it will no longer be able to dominate.

A further twist in this tale is the position of Russia. With its own vast reserves of natural gas, it can be seen as a competitor to Iran. Arguably less well positioned than Iran to supply both Europe and China, Russia is nevertheless a major player and has been assiduously courting China with an export deal since 2006. However, as Economides observes, “negotiations between the two countries have been on and off and, especially, the pipeline construction has been painfully slow”.

But Russia’s ambitions to expand its natural gas exports may explain why it has shown itself to be such a mercurial ally to Iran. Moscow’s ambivalent position towards US-led sanctions against Iran, suggests that Russia has its own agenda for hampering the Islamic republic as a regional energy rival.

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