Iraq, Syria and Iran sign Mou for gas pipeline

Oil ministers for Iraq, Syria and Iran have signed an Mou for the construction of a gas pipeline to transfer Iranian gas to Europe.

The 1500 km pipeline will transfer natural gas from Iran’s South Pars gas field in the Gulf to Iraq, Syria, and Lebanon and then potentially onto the Mediterranean Sea. The pipeline will take 3 - 5 years to build and will require the investment of up to US$ 10 billion.

The pipeline will have an estimated capacity of 110 million m3/yr. The pipeline will run from Assalouyeh to Damascus while passing through Iraq. The Iranians have hinted that they ultimately want the pipeline to reach the Mediterranean and Europe, as Iran is keen to increase its gas exports.

However, even if the pipeline does reach the Mediterranean it is highly unlikely any country in Europe would buy it at the moment as Iran is subject to trading sanctions banning European and NATO countries from having anything to do with Iran. This is why Iran has turned to Syria, Iraq and Lebanon to export its gas as all major international oil companies have pulled out of the country.

Even though Iran is the second largest holder of gas reserves in OPEC and the second largest exporter of crude oil, it has been unable to capitalise on these reserves, and trading sanctions are only getting stricter on the ruling regime as it’s legitimacy has been tested by internal revolts.

The agreement is evidence of increasing cooperation between Iran and Iraq though. Abdul Kareem Luaiby, Iraqi oil minister, said on Monday, “US sanctions have no impact on the relations between Iran and Iraq. Iraq welcomes expansion of its relations with Iran and we have witnessed enhanced cooperation between the two neighbouring countries in previous years.”

Read the article online at: https://www.worldpipelines.com/business-news/26072011/iraq_syria_and_iran_sign_mou_for_gas_pipeline/