Iran has long sought to play a role in Europe's burgeoning natural gas market and various factors, especially geopolitics, have worked against it. Now, in the wake of a new natural gas discovery in the Iranian section of the Caspian Sea, this could be changing.
"If the initial estimates are confirmed and exploration success is achieved, the Iranian sector of the Caspian Sea will play a significant role in gas exports to Europe in the near future, in which case Iran's new gas hub will be formed in the north to let the country supply 20 percent of Europe's gas needs from this region," said the head of Khazar Exploration and Production Company (KEPCO), Ali Osouli said.
The Teheran Times reported that the Chalous deposit is the second-largest natural gas find in the Caspian Sea, after Alborz, holding reserves equal to 11 phases of South Pars—the world's largest natural gas field, offshore Iran, which the country shares with Qatar. This would make Chalous the tenth-largest natural gas deposit in the world. Exploratory drilling at the deposit will require an estimated two years.
Oil Price noted that "the news of the discovery comes at a time when Europe is struggling to secure the natural gas supplies it needs for the coming winter when demand will increase substantially. Europe's gas storages are running on fumes because of the rebound in economic activity—not just there but also in Asia. This rebound drove gas prices on international markets to record highs."
Global demand for natural gas, including LNG, has been on the rise for five months in a row to July, with Latin America and Asia ready to pay top dollar for LNG, thus drawing cargoes away from Europe. Asia accounted for 74.6 percent of demand in July, Argus reported earlier this month, importing 22.6 million tons. Europe, in comparison, took in just 4.43 million tons, down from 5.5 million tons a year earlier.