The challenges of Iran’s gas export to Pakistan

According to Energy Press, Seyyed Mehdi Hosseini, in an interview with ILNA’s economic reporter, said about the implementation of the peace pipeline and the obstacles on the way of this project: “The peace pipeline has been talked about for decades and it has not been completed yet, I was during the prime minister’s time.” Benazir Bhutto had a trip to Pakistan, at that time there were two issues; One was the construction of a joint refinery in Pakistan and the other was a gas pipeline. At that time, this Pakistani official raised two points regarding the implementation of the peace pipeline. The meaning of this comment is that the implementation of the pipeline in this way has been ruled out. The second point, which is more important, is that the country of Pakistan had a good distribution network at its disposal. We also had to build the pipeline and provide gas to them. The price was important to them and they wanted the price of gas received from Iran to be competitive with fuel oil. In fact, they bargained for the price.

From the export of 10 million tons of LNG to China to the pending billion dollar pipeline

He continued: Although we have a gas imbalance now, when we developed South Pars, we had a lot of gas at our disposal and the domestic distribution of gas was not as it is today, so we were thinking about exporting gas, we even negotiated with China to build LNG and export it. We agreed to supply 10 million tons of LNG annually to this country, at that time a part of the gas was exported to Iraq and Turkey, and now the pipeline is waiting at the Pakistani border with billions of dollars.

The challenge of Iran’s export gas with the low rate of the Dolphin line

This senior expert in the field of energy said: What happened in these few years when we had gas and we could not sign an operational contract with Pakistan and the pipeline of this country is operational; The problem has been the pricing, the price of gas is regional and does not have an international rate, Pakistan wanted a low price and the price we once sold gas to Turkey was high. The result is that inside the country, especially after the Crescent issue, no one dares to offer a price lower than the price of gas exported to Turkey and suitable for the Pakistani market; did not have. Therefore, we were not able to offer the correct proposal suitable for the Pakistani market, because it is not like the stock market where the prices are clear, the prices are different in each market; For example, the market of Japan, India, Europe, etc. is different. The Persian Gulf market also has no price, on the other hand, Qatar has deliberately set the Dolphin pipeline to export gas to the UAE low so that we cannot compete with this country, as a result, when the gas price in the Persian Gulf is set low, it will be the example of the gas price in the region, but when we We cannot sell gas to Turkey cheaper than the export rate; We lag behind the market.

We do not have money to increase production

He pointed out that the project was not implemented abroad due to the fact that we did not have an agreement with Pakistan and the Pakistanis did not invest in connecting the pipeline to Iran. One is the supply of gas that was supposed to be exported to Pakistan through the pipeline; The question is whether today, when we are facing a gas imbalance, apart from South Pars, which almost all its phases have been developed, is there a defined project for investment? Of course, projects for gas production have been defined, if they are implemented in about 18 phases of South Pars, and in fact we can produce gas as much as another South Pars, so we do not have a problem in terms of reserves, what we do not have is capital, because the required credit is heavy and we do not have it; Because we are embargoed and cannot attract foreign capital, in terms of domestic capital, we are facing the problem of lack of liquidity and government budget deficit. Therefore, our challenge in gas supply; It is the capital that we don’t have. Therefore, if the peace pipeline project is even implemented, if there is no thought for investment; We will not have much success.