Iran’s Caspian Sea gas find ‘may be so large it could meet a fifth of European gas needs’

Iran is hopeful of confirming a huge new gas deposit located in the Iranian sector of the Caspian Sea, large enough to supply around a fifth of Europe’s gas needs, according to the country’s Khazar Exploration and Production Company (KEPCO).

The Chalous structure could conceivably bring about a new gas hub in northern Iran to complement the southern gas hub centred on the massive South Pars field in the Persian Gulf that Iran shares with Qatar.

KEPCO is the principal developer for the field, but technical and financial assistance will come from Russia and China, according to OilPrice.com, which on August 20 said Chalous is a “geopolitical gamechanger”.

The price and destination of Chalous gas would be co-ordinated with Russia, “adding to the energy power that Moscow has over Europe, already a key matter of contention between Europe and its Nato partner, the U.S.,” the publication wrote. 

'Quarter the size of supergiant South Pars'

KEPCO’s chief executive officer, Ali Osouli, has said the Chalous structure is estimated to hold gas reserves equivalent to a quarter of the supergiant South Pars gas field. South Pars has an estimated 14.2 trillion cubic metres (tcm) of gas reserves in place plus 18bn barrels of gas condensate. It already accounts for around 40% of Iran’s estimated 33.8 tcm of gas reserves and around 80% of Iranian gas production.

OilPrice.com added that Iran has a new 20-year agreement with Russia covering political, security, military, defence and economic cooperation that enables Moscow to keep de facto control over where and at what price the vast majority of Iran’s gas is sold.

It also wrote: “Controlling this potential threat to its own dominance over gas supplies into Europe – and the considerable geopolitical power over the continent that comes with this – has been a major concern of Moscow’s for many years, as has Iran’s capabilities in this respect. Iran has estimated proven natural gas reserves of 1,193 trillion cubic feet (Tcf), second only to Russia, 17 percent of the world’s total and more than one-third of OPEC’s.

“Additionally, Iran has a high success rate of natural gas exploration, in terms of wildcat drilling, which is estimated at around 80 percent, compared to the world average success rate of 30-35 percent. It has always been vital to Russia, therefore, to ensure that Iranian gas did not flood into Europe and thus undermine Russia’s key lever of power across the continent.”