The conflict between Russia and Ukraine continues, as do global gas supply issues. Iran hopes to step in and become Europe’s main gas supplier, replacing Russian gas exports.
Iran will offer an alternative to exporting Russian gas to Europe
Being the second largest gas reserve in the world, Iran has 34 trillion cubic meters of natural gas. This is nearly 17% of total world reserves.
Some believe that Iran can become Europe’s main gas supplier and replace Russian gas exports. However, Iranian analysts and energy specialists remain skeptical even with great reservations.
“A comparison of production and exports from Iran and Russia shows a huge difference. This huge difference naturally manifests itself in exports. If there is no investment in gas production and resource utilization, Iran will become dependent on gas imports despite all its reserves,” according to the CEO of the Iranian gas company.
In one year, Russian gas export is about 180 billion cubic meters. Europe and Turkey receive about 130 billion cubic meters. Iran’s annual gas export is at least 25 billion cubic meters.
The gas authority added that if Iran wants to multiply its gas production within ten years to 1.5 billion cubic meters per day. They need to invest $90 billion. He said that if there is no investment in gas production and resource utilization. Iran will become dependent on gas imports, regardless of all its reserves.
Improve global market share
A former senior Iranian energy ministry official said the country could improve its global market share by 1% to 10%. In addition, the country can claim a significant share of gas exports to Europe.
He said they needed to focus on exports and not domestic consumption to get there. Currently, most of the gas produced is consumed in the country. For this question, Iran’s global share has extremely decreased.
The former official proposes that Iran invest in liquefied natural gas (LNG) to diversify its gas industry. In this way, the country’s export market can expand to different parts of the world, including China, Japan, and Europe.
This requires accelerating the power of Iranian gas diplomacy, partnering with global markets, and initiating peaceful relations with countries. Iran must also increase the rate of investment in gas infrastructure. It includes LNG, pipeline and liquefaction facilities.
US LNG exports soar amid increased demand from Europe
Europe has been the number one importer of US LNG, especially now during the Russian-Ukrainian crisis of the past four months. U.S. LNG soared nearly 16% in March to a record high, according to preliminary data from Refinitiv. Liquefied natural gas shipments to Europe continue as European countries attempt to cut imports of Russian gas. At the same time, they are also looking to set low stocks.
Refinitiv data shows exports to all ports were around 7.43 million tonnes in March. It is up from 6.4 million tonnes in February and exceeded the previous 7.25 million tonnes in January. Europe took about 65%, Asia 12% and 3% went to Latin America.
Last month, global LNG prices remained high as European prices continued to acquire Asian demands. This week, the European LNG benchmark was trading at $39.22 per million British thermal units (mmBtu).
Image source: Penyulap/WikimediaCommons (Creative Commons Attribution-Share Alike 3.0 Unported)