The E.U. Southern Gas Corridor and the The E.U. Southern Gas Corridor and the Persian Gulf: Persian Gulf:

Prospects for Development and Security Prospects for Development and Security

of Gas Supplyof Gas Supply

Anthony LivaniosAnthony LivaniosCEOCEO

Energy Stream CMG – Oil & Gas Strategies Energy Stream CMG – Oil & Gas Strategies

International Conference on the Persian GulfInternational Conference on the Persian GulfBandar Abbass, IranBandar Abbass, Iran

22-23 November 2010 22-23 November 2010

Gas Supply and Demand in Gas Supply and Demand in EU EU

Current trends Current trends • Declining domestic production - increasing demand

•EU Gas consumption 1990 – 2005 : 50% rise

•EU Gas consumption 2009: 484 bcm

•EU Gas Demand: by 2030 : 771 bcm

•Current EU imports: 60% - by 2030 85%

•80% of EU imports: Russia, Algeria, Norway

•40% of EU gas imports: Russia

THE MAIN QUESTIONSTHE MAIN QUESTIONS1.Can Iranian Gas contribute to the to the

energy security in Europe?

2.Can the EU Southern Gas Corridor fully operate without sourcing Iranian gas?

3.Do European – Iranian natural gas trade relations create economic development?

4.Will the Persian Pipeline strengthen the EU security of gas supply and the efficiency of the Southern Corridor?

EU Diversification Policy & EU Diversification Policy & Security of Gas supply Security of Gas supply

• Diversification of routes – stability of transit countries

• Diversification of gas sources – access to gas reserves

• Liberalization of internal markets - flexibility

• Integrated EU gas market - Transportation capacity

Natural Gas reserves in Natural Gas reserves in Iran Iran

• Iran’s current production: 112bcm/yr

• Production forecast: 400 bcm/yr by 2020

• NIGC policy: “By 2025 10% control of global gas trade”

• Non-associated Gas fields reserves: 62% of total reserves – underdeveloped

• South Pars: “the world’s largest gas-filed: 40-50tcm”

• Iran proven gas reserves: four times larger than all the Central Asian countries combined – 28 tcm

Natural Gas reserves in Natural Gas reserves in Iran Iran

Iran’s gas field locationsIran’s gas field locationsSouth Pars South Pars

EU Southern Gas Corridor EU Southern Gas Corridor Nabucco – ITGI - TAPNabucco – ITGI - TAP

Pipelines under design Pipelines under design

•Nabucco: Nabucco: Turkey (Erzurum) – Austria Turkey (Erzurum) – Austria (Baumgarten)(Baumgarten)

• Capacity : 31 bcm/yr Capacity : 31 bcm/yr

•ITGI : ITGI : Interconnector: Turkey – Greece – Italy Interconnector: Turkey – Greece – Italy • Capacity: 10 bcm/yr to the EU Capacity: 10 bcm/yr to the EU

•TAPTAP: : Turkey – Greece – Albania – Italy:Turkey – Greece – Albania – Italy:•Capacity: 20 bcm/yr Capacity: 20 bcm/yr

•No pipeline consortium has reached an No pipeline consortium has reached an FID as of today FID as of today

The Southern Gas CorridorThe Southern Gas CorridorNabucco Nabucco

The Southern Gas Corridor The Southern Gas Corridor TAPTAP

The Southern Gas Corridor The Southern Gas Corridor ITGI ITGI

The Southern Gas Corridor The Southern Gas Corridor Challenges Challenges

• Nabucco : The most ambitiousNabucco : The most ambitious

• ITGI : The most mature pipeline – cost ITGI : The most mature pipeline – cost effective effective

• TAP: the most economically efficient - TAP: the most economically efficient - shortest route to Europe shortest route to Europe

• EU need for import increaseEU need for import increase

• EU delaying gas trading agreement EU delaying gas trading agreement with Iran with Iran

• Geopolitical challenges involving many Geopolitical challenges involving many players affect Southern Corridor players affect Southern Corridor developments developments

IRAN & The Southern Gas IRAN & The Southern Gas Corridor Corridor

• Iran’s access to the Southern Gas Iran’s access to the Southern Gas Corridor: Erzurum-Ancara pipeline – Corridor: Erzurum-Ancara pipeline – 14bcm (11bcm imports from Iran)14bcm (11bcm imports from Iran)

•Erzurum : a strategic link for gas Erzurum : a strategic link for gas transportation : Iranian gas to Turkish transportation : Iranian gas to Turkish grid & via ITG to Greece and the EU grid & via ITG to Greece and the EU market market

•Importing Iranian gas to reach needed Importing Iranian gas to reach needed capacity for the Southern Gas Corridor capacity for the Southern Gas Corridor

IRAN & The Southern Gas IRAN & The Southern Gas Corridor Corridor

• Can Nabucco operate without Can Nabucco operate without Iran?Iran?

• R. Mittschek: “Iran will offer natural R. Mittschek: “Iran will offer natural gas for export to Europe to interested gas for export to Europe to interested buyers”buyers”

• Z. Hernadi: “Nabucco becomes a Z. Hernadi: “Nabucco becomes a reality if we can get Iranian gas” reality if we can get Iranian gas”

• T. Erdogan: “Nabucco cannot be T. Erdogan: “Nabucco cannot be materialised without Iranian gas” materialised without Iranian gas”

• G. Schroeder: “Nabucco should be G. Schroeder: “Nabucco should be filled with gas from Iran” filled with gas from Iran”

IRAN & The Southern Gas IRAN & The Southern Gas Corridor Corridor

• “ “If you consider that all three pipelines If you consider that all three pipelines (Nabucco - ITGI – TAP)(Nabucco - ITGI – TAP) are integral parts are integral parts of the Southern Corridor, of the Southern Corridor, ««the modern the modern silk roadsilk road»» interconnecting countries and interconnecting countries and people, it is necessary to source gas from people, it is necessary to source gas from Iran”. Iran”.

• Sourcing Iranian gas enables Sourcing Iranian gas enables Nabucco, ITGI & TAP to materialize a Nabucco, ITGI & TAP to materialize a transport capacity of 61 bcm/yr of transport capacity of 61 bcm/yr of natural gas to the EU. natural gas to the EU.

CONCLUSION CONCLUSION

• Transporting Iranian Gas to Europe = Transporting Iranian Gas to Europe = security of gas supply to the EU security of gas supply to the EU

• Iranian gas to EU = diversification of Iranian gas to EU = diversification of sources sources

• Trade relations in gas with Iran = Trade relations in gas with Iran = creation of JVs, development of South creation of JVs, development of South Pars, new investments, technological Pars, new investments, technological know-how. know-how.

• Energy co-operation between Iran and Energy co-operation between Iran and Europe = creating growth and economic Europe = creating growth and economic development. development.