EU plans to put an embargo on Iranian gas import - new possibilities opened for growth of deliveries from shah-deniz

European Union plans a package of sanctions against Iran prohibiting Iranian gas import to EU, Reuters reported citing diplomatic sources.

Diplomats said that the embargo on gas deliveries from Iran will be most likely to be put on October 15, 2012 at the meeting of EU Foreign Ministers in Luxembourg.

"There is an agreement on gas. It is supported by the leading countries, such as Germany, UK and France," said the same source.

He added that in addition to the gas embargo, sanctions against Iran will be expanded in fields of finance and power generation.

The effective sanctions prohibit investments into the Iranian gas industry, but are not applied to its import to EU, which is insignificant.

Reuters reported that Iranian gas is delivered to the European countries via Turkey, which mixed it with Azerbaijani one. Diplomats believe that Turkey could ignore the embargo imposed by EU and continue adding Iranian gas into the export gas pipelines.

The European Union member-states earlier put an embargo in Iranian oil import, which entered into force on July 1, 2012.

Iran exports its gas to Turkey since 1996, when it has built the gas pipeline to the Turkish border, and Turkey extended this route to the gas distribution network near Erzurum city. Capacity of the pipeline is 10 billion cub.m. a year. However, during a long period Turkey imported about 7-8 billion cub.m. In the past years Iranian officials threatened to fine Turkey, if it does not import gas, and Turkish Botas company was forced to increase the volume of purchase, though Iranian gas is the most expensive one for Turkey. It is even more expensive that Russian gas supplied by Gasprom company. Therefore, Turkey reduced the volume of Azerbaijani gas import. According to Botas, during 2011 only 3.8 billion cub.m. of Azerbaijani gas was delivered to the Turkish market. But according to the contract, Turkey must import at least 6.3 billion cub.m. of Azerbaijani gas. 

In case of EU sanctions, Azerbaijan will have a good chance and Turkey will meet its contract obligations.-0--