A Turkish firm plans to push ahead with the development of a 35bn m³/yr pipeline intended to bring Iranian gas to Europe — despite the imposition of international sanctions on Iran.
Turkish firm Turang Transit will issue tenders in November-December this year for the construction of the Turkish section of the link, running from Agri on the Iranian border to Ipsala on the Greek border. Work is expected to begin next year for a 2016 start-up.
The pipeline is intended to ship gas from Iran's South Pars field — which it shares with Qatar — via Turkey and Greece to Austria. Turkey — which already imports some gas from Iran — may ultimately take some gas from the line, but its principal purpose is to deliver Iranian gas to Europe.
While financing is at an early stage, preliminary talks have begun with some Turkish banking consortiums and international lenders to fund the country's section of the pipeline, which should cost around €5.5bn. The entire project is expected to cost €12bn.
The project stems from a 2008 intergovernmental agreement between Turkey and Iran, since when preliminary work has been quietly continuing. Following feasibility work, Turkey's energy ministry recently approved a route change for the country's section of the pipeline — which has slightly shortened the route— and an environmental impact certification for the Turkish section is set to be granted at the end of August.
And it appears to benefit from a number of loopholes in the international sanctions regime against Iran. Turkish financial institutions have secured a waiver from the sanctions regime from the US government. And while European firms are prohibited by the sanctions regime from investing in infrastructure intended to bring Iranian gas to market, there is no such prohibition on the purchase of Iranian gas, according to an official in the European Commission's energy directorate.
The commission's's external action directorate did not respond to requests for comment on the pipeline plan. The US State Department said investment deals with Iran “would be a bad idea”.