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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
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.