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Iran inks gas pipeline deal with Iraq and Syria
by Staff Writers
Tehran (AFP) July 25, 2011

Iran, Iraq and Syria inked on Monday a Memorandum of Understanding for the construction of pipelines designed to deliver Iran's natural gas to the two Arab nations, local media reported.

"The overall cost of the project is estimated around $10 billion," deputy oil minister and chairman of the Iranian National Gas Company (NIGC), Javad Ouji, was quoted by the Mehr news agency as saying after the signing ceremony.

The construction of pipelines stretching for several thousand kilometres (miles) "should take three to five years once funding is secured," according to an estimate by Ouji on Sunday.

The MoU was signed in the southern Iranian port of Assalouyeh, the nation's gas hub, by Iraqi Oil Minister Abdelkarim al-Luaybi, his Syrian counterpart Sufian Allaw and Iran's oil ministry caretaker Mohammad Aliabadi, media reported.

Aliabadi quoted by the oil ministry news service dubbed the inking of MoU as sign on "strengthening and deepening trilateral relations."

According to Mehr, the document envisages setting up within a month three working groups to look respectively at the technical, financial and legal aspects of the project, which has been under discussion since 2008.

"Soon the feasibility studies will be given to an international consultant," Ouji said without detailing any timetable.

The Iranian official had on Sunday said he hoped the final agreement launching the project could be signed before the end of the year.

Iran has the second largest proven gas reserves in the world after Russia.

It currently consumes almost all of the approximately 600 million cubic metres (21.8 trillion cubic feet) per day of gas production, but hopes to double its output and export some 250 million cubic metres per day to its neighbours and to Europe from 2015 through developing a giant offshore gas field in the Gulf, which it shares with Qatar.

The project signed Monday calls for the construction of a 56-inch (142 centimetre) pipeline with a capacity of 110 million cubic metres a day, connecting Assalouyeh to Iraq and then to Syria, with the possibility of extending to Lebanon and Europe.

Ouji said on Sunday that Iraq should initially receive about 20 million cubic metres a day for its power plants, and Syria between 20 and 25 million cubic metres a day.

Iran and its eastern neighbour Pakistan earlier this year signed an agreement to build a pipeline designed to provide 21 million cubic metres a day of Iranian gas to Islamabad commencing 2014.

Ultimately, Iran plans to use the Iraq-Syrian pipeline to export gas to Europe, officials have said.

Iran is under severe international sanctions, aimed in particular at its energy and banking sectors, due to its controversial nuclear programme.

These sanctions have complicated the development of Iranian capabilities to export gas. All major Western oil companies have withdrawn from Iran in recent years, including from projects in South Pars, under pressure from Tehran's archfoe, Washington, and from the European governments.

Iranian and Chinese firms have taken over most of the abandoned projects, often creating technical and financial problems that have resulted in delays.

Iran in 2010 also had to abandon two major projects for the export of LNG -- an alternative to the construction of pipelines -- after the withdrawal of French Total and the Anglo-Dutch Shell group.

"Iraq tries to strengthen its relations with all countries, particularly its neighbours, and America's sanctions cannot influence this issue," Iraq's Luaybi was quoted as telling Iran's official IRNA news agency.

"The signing of the trilateral MoU ... is in itself another sign that Iraq is not influenced by America's policies with regards to Iran sanctions," he said.

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'Islamic pipeline' seeks Euro gas markets
Asalouyeh, Iran (UPI) Jul 25, 2011 - Iran, Iraq and Syria say they're set to sign an official contract to construct a natural gas pipeline connecting Iran's South Pars field to European customers.

Iran's state-run Press TV announced that a deal between Iran's interim Oil Minister Mohammad Aliabadi and his Iraqi and Syrian counterparts -- the biggest of its in the kind in the Middle East -- would be signed at Asalouyeh, Iran.

It was described as the next step in a process began three years ago to establish a 56-inch "Islamic Pipeline" to compete for European customers with the proposed Nabucco pipeline, which is to run from Azerbaijan's Caspian Sea gas fields through Turkey to Austria.

The proposed 3,480-mile Islamic Pipeline would originate in the South Pars gas fields, which Iran has been struggling for years to develop as a competitive alternative to Russian natural gas. The Iranian fields are estimated to contain eight percent of the world's natural gas reserves.

The contract signing was arranged during a round of May talks in Baghdad among Iran, Iraq and Syria, attended by Iranian First Vice President Mohammad-Reza Rahimi, where the pipeline's route, price, transit fee and foreign financing were discussed.

Iranian Deputy Oil Minister Javad Oji said then the construction of the pipeline would cost up to $6 billion and that it would ultimately have the capacity to pump 3.9 billion cubic feet of natural gas per day.

Oji told the official Mehr News Agency it had been agreed that the corridor route would "pass through Iran, Iraq, Syria, the southern Lebanon territories and also through the Mediterranean basin," with a refinery and infrastructure to be built in Damascus.

Iraq, Syria and Lebanon would be able to tap into the Islamic Pipeline for its own natural gas needs, Iran says.

Baghdad has said it wants up to 530 million cubic feet per day for its own needs and Syria is looking for up to 706 million cubic feet and Lebanon up to 247 million cubic feet, leaving 2.4 billion cubic feet for possible export.

Iran said Iraqi Oil Minister Abdul Kareem Luaiby as well as Syrian Minister of Oil and Mineral Resources Sufian Allaw were to be present Monday in Asalouyeh to sign the agreement.

Oji has said several European investors have expressed an interest in backing the project, which some analysts have predicted by 2030 could become the biggest rival to the Nabucco natural gas pipeline project.

Under the present plans, one part of the Islamic Pipeline's routes to the European market would be through an 807-mile pipeline being constructed in Iran by the National Iranian Gas Company, Mehr reported.

The first and second phases of this new pipeline, which connect Asalouyeh to Ahvaz, have been completed while contracts for the remaining two sections, valued at $1.3 billion, have reportedly been signed.

Iran said the pipeline's third portion -- a 373-mile stretch from Ahvaz to Dehkalan -- is to be completed within 24 months.

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Report: OPEC to earn $1 trillion in 2011
Washington (UPI) Jul 22, 2011
Net oil export earnings of the Organization of Petroleum Exporting Countries will top $1 trillion this year, the Energy Information Administration said citing consolidated figures for the 12 member countries. EIA, a statistical and analytical agency within the U.S. Department of Energy, said it based its OPEC income projections on its July 2011 short-term energy outlook. Based on ... read more

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