Spain and Iran come to a deal on natgas transport
Spain reached an agreement with Iran to ship natural gas from Iran to Europe following the release of sanctions against the country. Iranian authorities and an economic trade delegation of some 70 Spanish companies, including Repsol (ticker: REP) accompanied by government officials, visited Tehran Monday to discuss the details, reports Times of Israel.
Iranian Oil Minister Bijan Zanganeh met with Spanish Industry, Energy and Tourism Minister Jose Manuel Soria and declared Iran’s willingness to develop the infrastructure Spain needs to supply Europe with gas from the South Pars gas field.
“In the meeting we explained Iran’s facilities and programs for development of oil, gas and petrochemical industries to the Spanish companies and they expressed their interest to cooperate in these fields,” Zanganeh said. “It was emphasized in the meeting that Iranian and Spanish companies should continue their relations and the Spanish government needs to set the grounds for the presence of their companies in Iran,” he continued.
As the end of sanctions against Iran appears to be fast approaching, the Iranian industry will focus on developing its natural gas industry, Dr. Iman Nasseri of FGE, an international energy consulting group, told Oil & Gas 360 during an exclusive interview. “Bringing in investment for natural gas development is a top priority,” said Nasseri. Iran has some of the largest natural gas reserves in the world, but they have remained largely undeveloped.
“The future of natural gas development will be rapid,” explains Nasseri. “FGE’s expectatioins were, even without the lifting of sanctions, that development would be finished in about 10 years. With investment, it will be much faster. I believe we will see 7-8 Bcf/d from South Pars in the next 5-6 years.”
Iran remains one of the most bearish factors in the market right now, according to CIBC Head of Commodities Strategy Katherine Spector. During an exclusive OAG360® interview at The Oil & Gas Conference® Spector said the immediate impact of Iran coming back to the market would put pressure on prices, but it would take time for the full effect to be felt. “To really increase production more significantly, [Iran] is going to need to spend some money and bring in some service companies, things like that, and that’s not a process that can actually start until the sanctions are released.”