With its enormous natural gas reserves, Iran is looking to export large volumes of gas. Besides Turkey (see below), potential customers for Iranian gas exports include: Ukraine, Europe, India, Pakistan, Armenia, Azerbaijan, Georgia (interested in receiving Iranian gas via Armenia), Taiwan, South Korea, and even China. Exports could be via pipeline and/or LNG tanker, with possible LNG export terminals at Asaluyeh or Kish Island. As of February 2005, BG and NIOC reportedly remained interested in developing a $2.2 billion LNG plant at Bandar Tombak on the Persian Gulf coast. The plant is to comprise two LNG trains, with capacity of at least 4 million tons per year each, and with possible completion in 2008.
In late January 2002, Iran and Turkey officially inaugurated a much-delayed natural gas pipeline link between the two countries, following several years of delays due to economic, political, and technical factors. Exports of Iranian natural gas to Turkey could reach 350 Bcf per year by 2007. There are questions, however, whether Turkish demand will grow rapidly enough to absorb this volume of gas from Iran, in addition to gas slated to be supplied by Russia, Algeria, and Nigeria. In June 2002, for instance, Turkey halted Iranian gas imports, ostensibly due to "quality problems" but more likely due to lack of demand in Turkey and also the desire for a lower price. On November 13, 2002, Turkey announced that it had resumed gas imports from Iran after reportedly securing a lower price and a reduction in the "take-or-pay" percentage. In February 2004, Turkeys Energy Minister, Hilmi Guler, stated that Turkey would seek international arbitration on its natural gas price dispute with Iran. In April 2004, Iran said that it would not cut the price of natural gas to Turkey. In December 2004, gas flows from Iran to Turkey were cut for four days, reportedly due to "technical reasons." By May 2005, Irans Deputy Oil Minister was quoted as calling the natural gas pricing dispute with Turkey “insolvable.”
Iran reportedly is aiming for large-scale natural gas exports to Europe via Turkey.
In March 2002, Greece and Iran signed a $300 million agreement which calls for extending the natural gas pipeline from Iran to Turkey into northern Greece. After that, gas could be transported to Europe via Bulgaria and possibly Romania. A memorandum of understanding (MOU) was signed on this possibility in January 2003, and a joint working group set up in October 2003. Alternatively, gas could be transported via an undersea pipeline to Italy, where gas demand is expected to grow rapidly in coming years. A deep water option could be extremely expensive, however, making an overland route more likely.
In January 2004, Austrias OMV signed an MOU with the National Iranian Gas Export Co. (NIGEC) on possible cooperation regarding the proposed $5 billion "Nabucco" gas pipeline from Iran through Turkey to Austria. A decision on the Nabucco line was supposed to have come by the end of 2005, but was delayed in part due to the Iranian nuclear issue. If Nabucco goes ahead, gas could start flowing in 2011.
Another option to Nabucco is Ukraine, which has offered two possible routes for Iranian gas exports to Western Europe. Each of these routes would cross Armenia, Georgia, and Ukraine, and possibly utilize the IGAT I and II lines in Iran. In July 2005, Iran and Ukraine signed a Memorandum of Understanding on the supply of up to 1 Tcf per year of Iranian natural gas to Ukraine.