Iran ignores Trump, builds gas business

Nation has about $7tr worth of gas reserves sitting underground, based on European benchmark prices

Iran is hard at work gaining a foothold in the global energy market, and it’s not letting US President Donald Trump’s confrontational tone stop it from trying.

Political rhetoric is unlikely to turn into tangible impediments for its ambition to join Russia and Norway in the ranks of major gas exporters, according to Deputy Iranian Oil Minister Amir Hossein Zamaninia.

The nation has about $7 trillion (Dh25.7 trillion) worth of gas reserves sitting underground, based on European benchmark prices, and its doors are open to those who will help it cash in on the fortune. Zamaninia thinks those sorts of figures mean the business case for Iranian energy is too tempting for the world to pass up, even as its supreme leader Ayatollah Ali Khamenei and Trump exchange barbs.

The country may need as much as $100 billion to develop its gas business, but estimates vary widely. Majors from Royal Dutch Shell to Total SA agreed to assess oil or gasfields in Iran last year, but no deals have been signed yet. Total plans to sign a contract if Iran respects an international nuclear treaty and if the US sticks to it, Chief Executive Officer Patrick Pouyanne said Tuesday in an interview. Austria’s OMV AG has said Iran’s gas market is “a big opportunity”.

“There are concerns and the international capital is scarce, but our projects and our environment are so attractive that we don’t think we will face a great deal of difficulty,” Zamaninia said in an interview last week at the CWC Iran LNG & Gas Summit in Frankfurt. “We don’t think that the new administration in the US will pose a big problem in this department, in the oil and gas business.”

While Iran has the largest commercial volumes of natural gas in the world, the country is a smaller exporter than Bolivia. But that may soon change. Last year, US President Barack Obama lifted a decade of economic sanctions in exchange for greater access to facilities Iran may use to make nuclear weapons. Competition is intensifying, European prices have dropped 25 per cent in the past five years and Iran consumes almost as much as it pumps. There’s an election around the corner and political challenges have forced the country to delay some gas projects. “Iran’s got just a huge amount of potential but I don’t see anything major happening for some time,” said Christopher Haines, head of oil and gas at BMI Research in London.