With the start of a new round of talks on Iran’s oil, Iran and Spain reached an agreement to bring it into the European Union by shipping liquefied natural gas (LNG) to Spain.
In a joint meeting with Spain’s Industry, Energy and Tourism Minister Jose Manuel Soria, Iran’s Oil Minister Bijan Zanganeh announced his country's readiness to implement Spanish gas import terminals to set the ground for Iran to join Europe’s gas market, stating that the "talks between Iran and Spain on this topic will continue.’’
“It was emphasized in the meeting that Iranian and Spanish companies should continue their relations and the Spanish government needs to set the ground for the presence of their companies in Iran,” added Zanganeh.
Iran has no ability to freeze its gas into LNG for tanker exports beyond the reach of pipelines, after several stalled projects due to Western sanctions that forced foreign companies to pull out of Iran.
Sanctions on Iran may be lifted in 2016, under the terms of a nuclear deal struck in July, but it may take years for Iran to start exporting LNG.
Analysts say that Iran has already lost out on lucrative LNG exports in Asia, where customers pay the highest prices to Gulf rival Qatar, so Tehran has to look into Europe.
The EU hopes to import gas from Iran, which has some of the world's largest reserves, to reduce its dependence on Russia. However, even after sanctions are lifted, the lack of export infrastructure could delay plans.
The most feasible route for Iran's gas to reach Europe would be over Turkey - already a customer - although the existing Tabriz-Ankara pipeline would not be sufficient for major exports.
Iran has long lobbied to build a designated pipeline that would connect its huge South Pars gas field with European customers - the so-called Persian Pipeline.