Page 10 - AsianOil Week 46 2021

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Russia, China strike Iran gas field deal

PROJECTS & A finalised deal to develop Iran’s multi-trillion
COMPANIES dollar new gas discovery, the Chalous field in the
Caspian Sea, is reportedly regarded by Russian
officials “as the final act of securing control over
the European energy market”.
Russian companies will hold the major share
in the deal, followed by Chinese companies, and
only then Iranian companies, sources close to
the agreement were reported as saying by Oil-
Price.com on November 15. The trade publica-
tion also reported that new calculations show
that Iran, taking into account new estimates of
the gas contained in Chalous, looks set to be
soon recognised as holding the world’s largest
gas reserves, dropping Russia into second place. Previously, the estimates of Iran and Russia
Explaining why Iran would relegate itself were that Chalous contained around 3.5 tril-
to third place behind Russia and China in the lion cubic metres (tcm) of gas in place, equat-
development and exploitation of Chalous, the ing to around one-quarter of the 14.2tcm of gas
media outlet said that the Islamic Revolutionary reserves contained in Iran’s supergiant South
Guard Corps (IRGC)—the Iranian entity essen- Pars natural gas field in the Persian Gulf that
tially controlling field development companies accounts for around 40% of Iran’s total estimated
that will participate in Iran’s side of the deal— 33.8tcm of gas reserves.
”has stated in a series of internal discussions OilPrice.com reported that it has learnt that,
within the Iranian government recently that the following further studies by Russia, the Chalous
new terms of the Chalous deal that have placed discovery is now seen as essentially a twin-field
Russian and Chinese interests above those of site, with the fields nine kilometres apart, with
Iran are ‘the price we have to pay for Iran’s access ‘Greater’ Chalous having 5.9tcm of gas in place,
to the technology and manufacturing capacity and ‘Lesser’ Chalous having 1.2tcm of gas, giving
required for our missile program’.” a combined figure of 7.1tcm.
It added: “To gain effective control over these “Therefore,” the publication said, “the new
new Iranian gas flows through securing such a Chalous figures would give Iran a total natural
stake in Chalous, Russia privately assured Iran gas reserves figure of 40.9tcm, whilst Russia
that, in addition to development and exploration – for a long time, the holder of the largest gas
expertise, and some funding, it will also ‘seek reserves in the world – officially has just under
to support Iran’s interests in the matter of the 48tcm. That Russian figure, though, has not been
JCPOA [Joint Comprehensive Plan of Action, revised to account for usage, wastage, and gas
or nuclear deal] and in other matters at the UN’.” field degradation for many years, and, according
to Russian gas sources, is around 38.99tcm as of
Supergiant Chalous the end of 2020. Consequently, the Chalous find
Russia’s Transneft has, meanwhile, purportedly makes Iran the biggest gas reserves holder in the
in the past two weeks projected that supergiant world.”
Chalous alone can provide up to 72% of all of the Following both the upgrading of the gas
natural gas requirements for Germany, Austria reserves estimates in Chalous and spiralling gas
and Italy every year for the full 20 years that the prices across Europe of late, the new stake split
Chalous deal is set to run, while Chalous alone in the combined Chalous twin-sites is reportedly
could supply up to 52% of all of the European as follows: Russia’s Gazprom and Transneft will
Union’s gas needs over the period. together hold 40%, China’s CNPC and CNOOC
a combined 28% and Iran’s Khazar Exploration
and Production Company (KEPCO) 25%.
“Gazprom will have overall responsibility for
managing the Chalous development, Transneft
will do the transportation and related opera-
tions, CNPC is doing a lot of the financing and
providing the necessary banking facilities, and
CNOOC will be doing the infrastructure parts
and engineering,” said one quoted source.
Given the likely length of gas recovery at Cha-
lous – and the fact that Russia intends to take less
than 10% of it out over the course of its 20-year
deal –sources close to the deal estimate the total
value of the Chalous gas site at $5.4 trillion, Oil-
Price.com said.™

P10 www. NEWSBASE .com Week 46 19•November•2021