Iran’s Huge Caspian Gas Find Is A Geopolitical Gamechanger

Iran last week revealed a huge new gas deposit located in the Iranian sector of the Caspian Sea. The ‘Chalous’ structure is to be developed with the intention of forming a new gas hub in northern Iran to complement the southern gas hub centred on the massive South Pars field.

The principal named developer of the Chalous site is Iran’s Khazar Exploration and Production Company (KEPCO) but technical and financial assistance will also come from Russia and China. If the initial estimates of the gas reserves held in the Chalous deposit are correct then Iranian gas will be able to supply at least 20 percent of Europe’s gas needs. However, the size, price, and destination of this gas will be co-ordinated with Russia, adding to the energy power that Moscow has over Europe, already a key matter of contention between Europe and its NATO partner, the U.S.  According to KEPCO’s chief executive officer, Ali Osouli, the Chalous structure is estimated to hold gas reserves equivalent to a quarter of the supergiant South Pars gas field, or around 11 of its phases. South Pars has an estimated 14.2 trillion cubic metres (Tcm) of gas reserves in place plus 18 billion barrels of gas condensate and already accounts for around 40 percent of Iran’s total estimated 33.8 tcm of gas reserves and about 80 percent of its gas production. The 3,700-square kilometre (sq.km) South Pars site is part of the 9,700-square km basin shared with Qatar (in the form of the 6,000-square km North Dome) but the Chalous structure lies squarely within Iran’s sector of the Caspian Sea. This has not so far been affected by the recent disputes between the five littoral states that share oil, gas, and other rights in it: Russia, Iran, Kazakhstan, Turkmenistan and Azerbaijan.