Enabling the Iranian Gas Export Options: The Destiny of Iranian Energy Relations in a Tripolar Struggle over Energy Security and Geopolitics

390 Pages·2014·3.818 MB·English

by  Maximilian Kuhn (auth.)

Enabling the Iranian Gas Export Options
Maximilian Kuhn
Enabling the Iranian
Gas Export Options
The Destiny of Iranian Energy
Relations in a Tripolar Struggle over
Energy Security and Geopolitics
Maximilian Kuhn
Berlin, Germany
Doctoral Th esis Freie Universität Berlin, 2012
D188
ISBN 978-3-658-00092-9 ISBN 978-3-658-00093-6 (eBook)
DOI 10.1007/978-3-658-00093-6
Th e Deutsche Nationalbibliothek lists this publication in the Deutsche Nationalbibliografi e;
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„Für Josefine Frida“
1. Table of contents
Table of contents - 7 -
List of figures, tables, and maps - 11 -
List of Abbrevation / Glossary - 15 -
Acknowledgements - 19 -
Abstract - 20 -
Chapter One - 21 -
1.1 Chapter One: Introduction - 22 -
1.1.1 Introduction and Background - 22 -
1.2 The Statement of the Problem - 24 -
1.2.1 Scope of the Study and Research Questions - 25 -
1.2.2 Structure and Overview of the Study - 26 -
1.2.3 Research Background, and Literature - 28 -
1.2.4 Data Collection and Review of Available Sources - 35 -
1.3 Methodology - 36 -
1.4 Theoretical Foundation - 37 -
1.4.1 Distinguishing the Forest from Trees - 44 -
1.4.2 One Size Fits All – Finding One Theorie - 48 -
1.4.3 The Lowest Common Denominator - 51 -
1.4.4 The Essence of Game-Theory - 53 -
1.4.5 The Analytical Framework – or Funneling Information - 56 -
1.5 Significance of the Study - 59 -
PART I: Diagnosis - 63 -
2 Chapter Two: Gas Market - 64 -
2.1 The Role of Energy and Natural Gas - 64 -
2.2 The Triple A’ Argument for Natural Gas - 67 -
2.3 Natural Gas Primer - Why look at Natural Gas? - 70 -
2.3.2 The emergence of a global gas market - 80 -
2.3.3 The advent of Unconventional Gas - 90 -
2.4 Summary - 104 -
2.4.1 Market development and dynamics market cycle - 104 -
2.4.2 Conclusion and implications for Iran - 108 -
8 1. Table of contents
Chapter Three - 111 -
3 Chapter Three: Institutions - 112 -
3.1 Iran’s political system, institutions, and power structure - 112 -
3.2 Iran’s political regime - 113 -
3.2.1 Formal power structure - 117 -
3.2.2 The republican institutions - 125 -
3.2.3 Informal Power Structure - 131 -
3.2.4 Formal and informal structure conclusion/
summary - 143 -
3.3 Economic and Foreign Policy and its influence on the
energy industry - 151 -
3.3.1 Khomeini’s Leadership: - 151 -
3.3.2 The Rafsanjani Presidency 1989-1997 - 157 -
3.3.3 Khatami’s Presidency 1997-2005 - 173 -
3.3.4 Policies of President Ahmadinejad since 2005 - 183 -
3.4 Analytical findings and theoretical backing - 193 -
Chapter Four - 201 -
4 Chapter Four: Infrastructure - 202 -
4.1 Iran’s energy policy and Institutions influence on Energy
decisions - 202 -
4.1.1 Energy decision making, structure and control - 203 -
4.1.2 Iran’s gas industry organization and structure - 207 -
4.1.3 Iran’s gas production, allocation and policies - 208 -
4.1.4 Excursus: Iran’s petrochemical industry - 222 -
4.1.5 Iran’s natural gas infrastructure projects - 225 -
4.1.6 Future Pipeline Plans - 236 -
4.1.7 Import and Export Pipelines - 238 -
4.1.8 Gas import pipelines - 239 -
4.1.9 Gas export pipelines - 240 -
4.1.10 LNG export plans and LNG projects - 248 -
4.1.11 Summarizing Iran’s infrastructure projects - 257 -
4.1.12 Analysis of Iranian gas sector issues and - 257 -
conclusion
4.2 Analytical findings and theoretical backing - 260 -
1. Table of contents 9
Chapter Five - 263 -
5 Chapter Five: Investment - 264 -
5.1 Iran’s contractual and legal framework for foreign
investments - 264 -
5.2 Early history and beginning of oil and concessions in Iran - 265 -
5.2.1 Tobacco Régie and Money Loans - 268-
5.2.2 D’Arcy Concession 1900 – 1932 - 274 -
5.3 From the D’Arcy Concession to British Petroleum (BP) - 276 -
5.3.1 Details of the D’Arcy Concession - 280 -
5.3.2 The 1933 Concession and the way to
nationalization - 283 -
5.3.3 Nationalization 1950 – Mossadegh and the 1979
Revolution - 285 -
5.4 Post-Islamic Revolution Investments - 288 -
5.4.1 Summarizing findings on contractual structure in
Iran - 292 -
5.5 Investment Chapter Summary and Conclusion - 294 -
5.6 Theoretical backing of the findings - 296 -
Chapter Six - 299 -
6 Chapter Six: International Relations - 300 -
6.1 The Story of International Sanctions against Iran - 300 -
6.1.1 Iran Libya Sanctions Act (ILSA), 1996 - 303 -
6.1.2 Recent Developments - 308 -
6.1.3 Getting Out of the Box - 315 -
6.1.4 External Relations and Potential Competition for
Markets - 318 -
6.2 The Macro Level Setting: Geopolitics and Gas Markets - 318 -
6.2.1 Russia - 319 -
6.2.2 Qatar - 323 -
6.2.3 Turkmenistan - 328 -
6.2.4 North America (US) - 329 -
6.3 Findings - 333 -
10 1. Table of contents
PART II: Prescription - 335 -
7 Chapter Seven: Prescription - 336 -
7.1 Summary, Conclusion, Discussion and Future Research - 336 -
7.1.1 Summary - 336 -
7.1.2 General Discussion and Recommendation - 340 -
7.1.3 Conclusion and Outlook - 344 -
7.1.4 Future Research - 345 -
APPENDIX - 349 -
Appendix A, D 'Arcy Concession Agreement [Persia] - 349 -
Appendix B, 1933 Anglo-Persian Oil Company - 355 -
Concession Agreement [Persia]
Appendix C; Interviewees - 370 -
BIBLIOGRAPHY - 372 -
Archive and Manuscript Collections - 372 -
Books, book chapters, academic journal articles and other sources - 375 -
1.1 List of figures, tables, and maps
Figures
Figure 1-1: Energy as a research subject: In the overlap of different - 42 -
Figure 1-2: The Funnel approach on macro, meso and micro level - 58 -
Figure 2-1: Worldwide and regional gas consumption (Mcm) - 66 -
Figure 2-2: Earth Energies for the Millennia - 68 -
Figure 2-3: The Age of Energy Gases - 69 -
Figure 2-4: Comparing pipeline versus LNG cost (2002) - 76 -
Figure 2-5: Transportation routes for Iranian gas (Pipeline vs. LNG) - 77 -
Figure 2-6: Pipeline vs. LNG cost for Iranian gas to Europe - 79 -
Figure 2-7: Iran caught between commitment and flexibility value - 80 -
Figure 2-8: Evolution of international LNG trade - 82 -
Figure 2-9: Cumulative Number of LNG Ships by Year - 84 -
Figure 2-10: LNG Fleet Charter (Operational vs. Ordered) - 85 -
Figure 2-11: European gas market supply to 2020 - 86 -
Figure 2-12: Regional Distribution of Unconventional Gas Resources - 95 -
Figure 2-13: Developments in the gas market: The growth cycle - 106 -
Figure 3-1: Structure of the formal power structre in Iran - 118 -
Figure 3-2: The Informal Power Structure in Iran - 134 -
Figure 3-3: Economic resources of the main political factions - 145 -
Figure 3-4: Timeline of important developments in Iran - 148 -
Figure 3-5: Oil price development during Rafsanjani’s Presidency - 158 -
Figure 3-6: Oil price development during Khatami’s Presidency - 172 -
Figure 3-7: Oil price development during Ahmadinejad’s Presidency - 185 -
Figure 4-1: Structure of the Iranian energy sector decision making process- 206 -
Figure 4-2: Iran’s gas production (1950-2010) - 210 -
Figure 4-3: Iran’s Gas Productive Capacity vs. Demand - 212 -
Figure 4-4: Iran’s gas production vs. consumption (1990-2020) - 213 -
Figure 4-5: Iran’s gas consumption by industry - 214 -
Figure 4-6: Iran’s gas exports by destination (mcm) - 216 -
Figure 4-7: Iran’s vs. Middle East planned capacity additions (%) - 225 -
Figure 5-1: Asymmetry in concessions between Iran and APOC/ AIOC - 295 -
Figure 6-1: Trade balance between Iran, the US and the EU - 301 -
Figure 6-2: Investments in IRI Oil and Gas Sector (1999-2009) - 317 -
Figure 6-3: Russia’s Gas Exports (Mcm) - 322 -
Figure 6-4: Qatar’s Gas Exports by Destination (Mcm) - 323-