HomeMediaLatest NewsIran's plans to create a gas hub with the participation of Russia

Iran's plans to create a gas hub with the participation of Russia

08 June 2023

Belogoryev Alexey M. Research and Development Director, Director of the Center for Energy strategic analysis and forecasting

Alexey Belogoryev, Research and Development Director at the Institute for Energy and Finance, commented to Rambler on the prospects for creating a gas hub in Iran.

"The term hub can mean completely different concepts. A hub can be just an infrastructure project - a kind of "hive" where gas is transferred from the seller to the consumer. A hub can also be a trade hub - not just a node for the physical transmission of gas, but also a place for trade operations. But most often the term hub refers to the node where pricing takes place. But what Iran means by "hub" in this case is a big question. Obviously, it does not mean a pricing hub, because Tehran is still very far from it. It is also difficult for the country to count on the creation of a trade hub due to financial sanctions. Such a hub requires a very serious development of financial transactions, including free access to the dollar zone, which Iran is deprived of," Belogoryev said.

At the same time, the specialist admitted that Iran is able to create a technical hub - a point for transferring gas:

“Now Iran is building relations with Saudi Arabia. In addition, it has good relations with the United Arab Emirates, Oman and Qatar. And Tehran already had plans to develop pipeline gas supplies to the countries of the Arabian Peninsula, so it is quite possible that the project will move along this path.

Belogoryev also assessed the prospects for conducting swap transactions at the Iranian hub.

"It is clear that Russia will have a certain interest in swap transactions, because physically supplying Russian gas there is definitely not economically promising. We are talking about swap transactions with Azerbaijan, Asian countries. But the question is what will be exchanged for what. Yes, Russia can supply pipeline gas, for example, to northern Iran, where there is a shortage of it, but this will not be very profitable. It is easier and cheaper to use Turkmen gas for this. Of course, Russian supplies through Azerbaijan are possible. But the question is what Iran can offer in return He could offer LNG, but the country does not have it, and will not appear in the near future ... Theoretically, Russian gas could be launched to the west of Iran, and Iran would supply gas to Pakistan instead of Russia. The project to supply Iranian gas to Pakistan has existed for several decades, but it again runs into sanctions restrictions," the expert said, also noting that in recent years Iran has not considered Europe as a priority for future gas exports.


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