The European Commission vice-president for energy union, Maros Sefcovic, said during a visit to Azerbaijan last week that the European Union was ready to negotiate Iran’s participation in the Southern Gas Corridor (SGC), a system of pipelines designed to pump Azerbaijani gas from the Caspian region to southern Italy via Georgia, Turkey, Greece and Albania.
The European bloc is keen to get its hands on Iranian gas and has already held talks with Tehran on the issue. This means it is unlikely that the EU will budge on its opposition to US President Donald Trump’s demands for revising the Iran nuclear deal.
Two different visions
It has been reported that the US State Department is trying to persuade the EU to collaborate in improving the pact that Iran and six world powers (the United States, China, Russia, Germany, the United Kingdom and France) signed in 2015. Aimed at reining in potential military applications of Tehran’s nuclear program in exchange for relief from economic and financial penalties, the accord has been criticized by Trump since his presidential campaign.
Last month, the US president suspended nuclear-related sanctions on the Islamic Republic for another 120 days. However, he said Washington would abandon the agreement if European signatories did not agree to modify part of it.
Trump is seeking an additional agreement to limit Iran’s uranium enrichment permanently – under the current terms, restrictions expire in 2025. The US commander-in-chief also wants a stronger regime of inspections by the International Atomic Energy Agency, and the imposition of new sanctions if Tehran develops or tests long-range missiles. He says that without these changes the Islamic Republic will be able to make a nuclear bomb.
So while Trump has basically sent an ultimatum to the EU, the State Department has chosen a softer approach, inviting the European grouping and its major countries to consider working together on what Washington views as the Iran nuclear pact’s deficiencies.
The first response to the US diplomatic move is not encouraging, however. On Monday, the French Foreign Ministry said Paris was committed to the deal with Tehran, which has to be strictly implemented. Of Trump’s requests, the EU seems willing to discuss only the one regarding Iranian missile activities. But EU foreign-policy chief Federica Mogherini has time and again emphasized that this issue is not related to the nuclear accord.
Iranian gas and European energy independence
The reality is that the EU is eager to deepen business interactions with Iran, and gas export is a promising sector, particularly in relation to the construction of the SGC. This infrastructure project, which is worth US$41.5 billion, is intended to reduce Europe’s dependence on Russian energy resources – Russia’s monopolist Gazprom provided EU countries with 151 billion cubic meters (bcm) of gas in 2016.
The SGC will consist of three conduits, the South Caucasus Pipeline (SCP), the Trans-Anatolia Natural Gas Pipeline (TANAP) and the Trans-Adriatic Pipeline (TAP). It is expected to start deliveries to Europe in 2020, piping 10bcm of gas from the Shah Deniz field on Azerbaijan’s Caspian Sea coast.
Brussels is interested in ramping up the capacity of the SGC system with sources of supply other than the Caucasian country. The objective is to increase potential supplies to 80-100bcm of gas annually down the line. To reach this goal, the EU aims to connect the SGC platform with gas fields in Turkmenistan, Iraq, the eastern Mediterranean Sea and Iran.
Tehran is not indifferent to the EU’s courting. It is actually already cooperating with the SGC consortium, given that the National Iranian Oil Company has a 10% stake in the development of the Shah Deniz field.
Iran could send gas from its South Pars gas field, in the Persian Gulf, to Europe through Turkey. However, it must first build a 1,900-kilometer pipeline to connect South Pars with TANAP. The prospective IGAT-9 conduit should transport 110 million cubic meters of gas per day.
The problem is that its cost is estimated at $7 billion. This, combined with the $50 billion needed to complete South Pars’ development and preserve its output level after 2023, make the creation of a gas connection between Iran and Europe very challenging without the help of foreign investors.
European energy companies could play a major role in modernizing Iranian gas infrastructure. Possible new US sanctions against Tehran are clearly at odds with this design.
In its National Security Strategy, the Trump administration says it will help allies and partners reduce reliance on “those that use energy to coerce.” Paradoxically, Washington’s confrontational position toward Iran risks undermining the EU’s efforts to diversify its energy suppliers and, accordingly, degrade Russia’s ability to use gas exports to influence European geopolitics.
Trade is one way of fostering stability and minimizing threats. The EU sees it but the US doesn’t. The US does not need Iranian gas or oil. EU and Iran need each other for progress. The US is the elephant in the room.
No Iran dont want SGC, Iran wants to use Iran-Iraq-Syria pipeline,
Europe made a decision that an Islamic future is their preferred cultural option the migration to preferring Islamic business alliances is simply an extension
"Aimed at reining in potential military applications of Tehran’s nuclear program in exchange for relief from economic and financial penalties, the accord has been criticized by Trump since his presidential campaign"
The answer is simple. Since the "penalities" is preventing Iran from using the dollar as a currency of exchange Tehran needs to move away from the dollar. Transactions with the EU will most likely be done with the Euro.
As for this:
"European energy companies could play a major role in modernizing Iranian gas infrastructure. Possible new US sanctions against Tehran are clearly at odds with this design."
As long as European companies come to an arrangment with Tehran that moneys be paid in a basket of currencies other than the dollar they should not be at odds with American sanctions.
Another signal to delusional Washington that its hegemonic days are over.
This also is the European delusion all over. Europe is at present not any more rational then US. Let us look at the Azerbaijan, Georgia, Turkey, Greece, Albania, Italy route. It is much shorter to build a pipeline from Libya to Italy. And cheaper by mutlifold of tens of billions, if taken from the Turkish Stream, accross Greece to Italy. But the cheapest routes are blocked by US. Libya, US controls, too bad France and Italy. As for Turkish Stream, already under construction, it is Russian gas, but it could be Azerbaijan gas. Azerbaijan already has active gas pipeliness connecting it to Russia. Thus, no need to construct anything. So, Europe already missed on South Stream, which was cancelled due to US pressure. And that pipeline was to be build by Russia, for free, in agreement with the countries that were to host South Stream transit. It was waiting on US touted Nabucco! What happened to it? Nothing, cancelled. Not economic. It was Hillary’s baby, and a lie from the begining to the end. Just to prevent Europe doing new gas deals with Russia.
Now Europe is playing with fire again. Everybody knows that Azerbaijan does not have the quantity that this pipeline requires. Everybody, including Azerbaijan, told publicly — we do not have enough, your problem. Now, to keep this fantasy running, let us a/ resurect an old issue, of building gas pipeline under Caspian Sea, to tap into Turkmenistan’s reserves; non-starter, Caspian countries do not agree, and b/come up with an insane track for the South Pars field — in the Gulf, across the mountains of Iran to Azerbaijan? Why bother? Gas from Iran’s Gulf, the field shared with Qatar, can much easier be trasported via Iraq, to Syria, and connect to Turkey. But this is why US is insanely interested in controlling Syria, Turkey borders. Also, Turkmenistan is having pipiline in operation to China, and has committed to another US favorite, Turkmenistan, Afghanistan, Pakistan, India pipeline. Good luck. This is to prevent gas from Iran to go to gas hungry markets of Pakistan and India. But gas from Iran to Pakistan and India will not face any political or geografic obstacles, while the one across Afghanistan, could be a challenge, both military and geografic.
So, US is creating a system of tolls accross any areas where energy can easily flow, without paying toll to US, being financed by US banks, or buying equipment and providing staff for the implementation. There was a story of US super abundant gas from fracking, but this story somehow is not taking traction. May be because even conservative publications like Forbes has published last year a sizeable analysis on the unprofitable shale exploration, where money is being burned to produce gas or oil. Currently, it costs between 1.50 and 2.50 dollars to produce for each dollar earned from sales. It is all just a banking miracle, until one day we are asked to bail the banks out.
So, Europe is going ahead with the new version of Nabucco, but the fat lady just refuses to sing. The gas from Iraq certainly can be used, provided that US stops controling the permanent battlefield, and continues arming and feeding constantly re-uniformed groups to keep the place in flames. Good luck with that, Iraq. The price US will name for allowing transit may be control of Bagdad government. So, Europe is playing with fire , literally. Because the oil is being stagnant, and in spite of the rigged market to make it look like there is a glut, one day the flat-lined production, even without Russia-Saudi schema to cut production, will result in shortage of oil. And then, schemas for LNG will be more expensive, as it will require that LNG is transported by expensive oil. Europe need to refit its industries to gas, as soon as possible, and get away from oil based energy. If it dithers much longer, it will be left without options. US is still betting that Russia will have to keep Ukrainian pipeliness operational, if Europe resistst Turkish Stream. But all the bets may be off — as Russia is finding more customers in Asia, and may not be able to service Ukainian pipeline past several short term extensions. Even Pakistan is now under made up treat of supporting terrorism, a crazy idea — considering that US literraly built terror network in Pakistan, by lauching Al-Qaeda there, as well as Taliban. But as Pakistan distanced itself from being helpful in launching ISIS, I guess it is now out of favor. Not to mention, the danger of being the conduit of easily transported Iranian gas, to India’s doorstep. And dangle it there. So, as the games are being played, many silly things are happening. Like US importing Russian LNG, placed on Netherlands ships, and reloaded on UK ships. destination Boston LNG terminal. And another ship of Russian gas under way. The excuse? Northwest had an exceptionally cold winter, so it has temporary shortage! What winter?
"The European bloc is keen to get its hands on Iranian gas and has already held talks with Tehran on the issue. This means it is unlikely that the EU will budge on its opposition to US President Donald Trump’s demands for revising the Iran nuclear deal"
"Money talks (Trump) BS walks.
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