• 4 minutes Will Libya Ever Recover?
  • 9 minutes USGS Announces Largest Continuous Oil Assessment in Texas and New Mexico
  • 13 minutes What Can Bring Oil Down to $20?
  • 16 minutes Venezuela continues to sink in misery
  • 17 hours Alberta govt to construct another WCS processing refinery
  • 4 hours Rage Without Proof: Maduro Accuses U.S. Official Of Plotting Venezuela Invasion
  • 7 hours Paris Is Burning Over Climate Change Taxes -- Is America Next?
  • 7 hours Instead Of A Withdrawal, An Initiative: Iran Hopes To Agree With Russia And Turkey on Syrian Constitution Forum
  • 18 hours Let's Just Block the Sun, Shall We?
  • 9 hours Water. The new oil?
  • 4 hours Storage will in time change the landscape for electricity
  • 2 days Quebecans Snub Noses at Alberta's Oil but Buy More Gasoline
  • 2 days U.S. Senate Advances Resolution To End Military Support For Saudis In Yemen
  • 2 days OPEC Cuts Deep to Save Cartel
  • 7 hours Regular Gas dropped to $2.21 per gallon today
  • 2 days Global Economy-Bad Days Are coming
Offshore Drillers Bullish On 2019 Despite Falling Prices

Offshore Drillers Bullish On 2019 Despite Falling Prices

Drillers are expected to green-light…

Oil Markets Stuck As Hedge Funds Remain Bearish

Oil Markets Stuck As Hedge Funds Remain Bearish

Crude prices haven’t staged much…

U.S. Grants Iran Sanctions Waiver To Southern Gas Corridor

iran

The U.S. is granting an Iran sanctions waiver to the Southern Gas Corridor natural gas pipeline projects designed to carry Azeri gas from the Caspian Sea to Turkey and onto Europe by-passing Russia.

Iran’s NICO holds a 10-percent stake in the Shah Deniz consortium that is developing the Shah Deniz 2 gas deposit in Azerbaijan, which will be the starting point for the Southern Gas Corridor.

The executive order signed by U.S. President Donald Trump on Monday contains a “Natural Gas Project Exception” which describes the Southern Gas Corridor without naming it.

The natural gas project exemption is referencing the Iran Threat Reduction and Syria Human Rights Act of 2012, which stipulates that the act has exceptions for certain natural gas projects “for the development of natural gas and the construction and operation of a pipeline to transport natural gas from Azerbaijan to Turkey and Europe”, and “that provides to Turkey and countries in Europe energy security and energy independence from the Government of the Russian Federation.”

Last month, BP and its partners started up the US$28-billion Shah Deniz 2 gas development in Azerbaijan—the starting point of the Southern Gas Corridor for gas supplies into Europe expected to reduce European dependence on Russian gas.

The Southern Gas Corridor consists of several separate energy projects with a total investment of around US$40 billion. Apart from the Shah Deniz 2 development, the Corridor will include three pipelines—the South Caucasus Pipeline (SCPX) to Azerbaijan and Georgia; the Trans Anatolian Pipeline (TANAP) to Turkey; and the Trans Adriatic Pipeline (TAP) planned to cross Greece, Albania, and end up in Italy.

While yesterday’s executive order exempted those pipeline projects from sanctions, it didn’t shed light on the Rhum gas field in the UK North Sea, in which BP is selling its 50 percent stake to Serica Energy. The other 50 percent is held by Iranian Oil Company (U.K.) Limited, a subsidiary of the National Iranian Oil Company. Serica and BP are seeking U.S. clarification on the Rhum field.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment
  • Mamdouh G Salameh on August 08 2018 said:
    Granting an Iran sanctions waiver to the Southern Gas Corridor (SGC) natural gas pipeline projects will neither have any immediate practical implications for Azeri gas supplies to the European Union (EU) since the SGC will not be operational until 2020/21 nor for Russian gas supplies to Europe.

    Despite the fact that Iran holds a 10% stake in the Shah Deniz 2 gas project, the US could not sanction it since this is will bring the SGC to a standstill.

    However, one could not but feel that the US waiver for the SGC is motivated by US continued plans to loosen Russia’s grip on the European gas market.

    The SGC will Initially supply 6 billion cubic meters per year (bcm/y) of gas to Turkey and another 10 bcm/y for transit to Europe by 2020/21 compared with 224 bcm/y supplied by Russia to the EU in 2017.

    Some experts are saying there is no justification for this massive gas pipeline project as it will not even help reduce Europe’s dependency on Russian gas. But now it seems that TAP, the western leg of the SGC, could in fact be used to deliver Russian gas into Europe.

    In January 2017 the Russian gas Giant, Gazprom, said it is interested in using TAP, likely by connecting the TurkStream gas pipeline to it for shipping Russian gas to Europe. And it turns out that a number of the members of the TAP consortium would be in favour of this scenario.

    Moreover, another Russian energy giant, Lukoil” is already one of the companies developing Shah Deniz II. The European Bank for Reconstruction & Development (EBRD) has even arranged $500 million loan for Lukoil’s share in the Shah DenizII project.

    And with its current network of gas pipelines to the EU soon to be augmented by the Turkstream pipeline across the Black Sea to Turkey and Europe and the Nord Stream 2 under the Baltic to Germany, not only Russia’s grip on European gas markets is tightening but it will also continue unabated for the foreseeable future. Currently, almost 40% of the natural gas consumed by Europe comes from Russia.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News