European Views | The conflict between Russia and Ukraine continues and so do the global gas supply issues. Iran hopes to step in and become Europe’s main gas provider replacing Russian gas export.
Iran to Offer Alternative to Russian Gas Export in Europe
Being the second-largest gas reserves globally, Iran has 34 trillion cubic metres of natural gas. It’s nearly 17% of the world’s total reserves.
Some believe that Iran can become Europe’s main gas provider and replace Russian gas export. However, Iranian analysts and energy specialists remain sceptical even with a large reserve.
“A comparison of the production and exports of Iran and Russia shows a huge difference. This huge difference naturally manifests itself in the exports. If there is no investment in gas production and utilisation of resources, Iran will become dependent on gas imports despite all its reserves,” according to the CEO of the Iranian gas company.
In a year, Russian gas export is roughly 180 billion cubic metres. Europe and Turkey receive around 130 billion cubic metres. Iran’s yearly gas export is at least 25 billion cubic metres.
The gas authority added that if Iran wants to multiply its gas production in about ten years to 1.5 billion cubic meters a day. They must invest $90 billion. He said that if there is no investment in gas production and resource utilisation. Iran will become reliant on gas imports, regardless of all its reserves.
Improving Share of the Global Market
An ex-Ministry of Energy senior Iranian official said the country could improve its global market share from 1% to 10%. Additionally, the country can assert a large share in gas exports to Europe.
He said that they need to focus on exports and not on domestic consumption to make it happen. Currently, most of the gas produced is domestically consumed. For this matter, Iran’s global share has extremely decreased.
The former official proposes that Iran must invest in liquefied natural gas (LNG) to variegate its gas industry. This way, the nation’s export market can burgeon to different parts of the world, including China, Japan, and Europe.
It requires accelerating Iran’s gas diplomacy’s power, associating 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 From Europe’s Higher Demand
Europe has been the top importer of US LNG, especially now during the Russia-Ukraine crisis for the past four months. The US LNG soared almost 16% in March to a record high, the preliminary Refinitiv data suggests. Shipments of liquefied natural gas to Europe continue because European countries are trying to axe Russian gas imports. At the same time, they are also seeking to establish low inventories.
Refinitiv data shows that exports to all harbours were around 7.43 million tonnes in March. It’s up from 6.4 million tonnes in February and surpasses the previous 7.25 million tonnes in January. Europe took about 65%, Asia took 12%, and 3% went to Latin America.
Last month, global LNG prices stayed high, with European prices continuing to acquire Asian demands. This week, the European LNG benchmark traded at $39.22 per million British thermal units (mmBtu).