ME's Biggest Gas Deal Ready for Signing

Iran, Iraq and Syria will sign the biggest contract to export and transit natural gas in the Middle East in Assalouyeh on Monday.

Final correspondences have been made with Iraqi Oil Minister Abdul Kareem Luaiby and Syria's Minister of Oil and Mineral Resources Sufian Allaw to come to Assalouyeh to sign the draft agreement, Mehr News Agency reported.

Iran, Iraq and Syria began talks on export and transit of gas in 2009 and meetings have been held in Tehran, Baghdad and Damascus.

The three countries, in their last meeting, reached an agreement on the general outlines of the draft agreement for transfer, transit and export of gas.

It is predicted that the draft agreement will make it possible to transit and export gas from South Pars gas field to Iraq and Syria and in the future to Lebanon and the Mediterranean coast.

Meanwhile, Iran, Iraq and Syria have also reached a general agreement on the construction of a 56 inch pipeline extending for 5,600 kilometers (also known as Islamic gas pipeline) to transport 110 million cubic meters of gas daily.

An international consulting firm has been hired by the three countries to determine the location of the pipeline and ways of procuring the finances.

Some $6 billion will be needed for constructing this gas pipeline and so far a number of European financers have voiced their readiness to finance the project.

Nabucco and South Stream's Rival

Studies by reputed international institutions reveal that almost one percent is added to Europe's gas consumption level each year.

Presently, European states consume 500 billion cubic meters of gas per annum and the figure is expected to reach 700 billion cubic meters in 2030.

Currently, Nabucco, South Stream and IGI pipelines supply gas to European Union (EU) member states. Except for the South Stream project, the other two projects lack significant gas resources.

Economic experts maintain that the Iran's absence from Nabucco pipeline project is the Achilles heel of this project and in case the Islamic gas pipeline is built, Iran's 33.1 trillion cubic meters of gas reserves can become the most important rival for Nabucco pipeline by 2030.

Based on estimates, by 2020, the gas needs of Iraq, Syria and Lebanon will be 10 million cubic meters per day to 15 million cubic meters per day, 15 million cubic meters per day to 20 million cubic meters per day and five million cubic meters per day to seven million cubic meters per day, respectively.

Given the Islamic gas pipeline's capacity for transfer of 110 million cubic meters per day, the gas needs of all countries located along this route can be supplied and there will be an excess 70 million cubic meters per day which can be used for export to other countries, especially the EU members via Mediterranean Sea coasts.

Under present conditions, one of Iran's routes for transport of gas to the Islamic pipeline and Europe is the six-nation pipeline stretching approximately 1,300 km.

So far, construction of the first and second sections of this pipeline, connecting Assalouyeh to Ahvaz with a length of 611 km, has been completed. The third and fourth sections of this pipeline are under completion.

The pipeline has the capacity to transfer 100 million cubic meters of gas daily.