University of Dundee DOCTOR of PHILOSOPHY Exports of Iranian
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University of Dundee DOCTOR OF PHILOSOPHY Exports of Iranian natural gas to regional and international markets a study of political, legal and economic barriers Hassanzadeh, Elham Award date: 2013 Link to publication General rights Copyright and moral rights for the publications made accessible in the public portal are retained by the authors and/or other copyright owners and it is a condition of accessing publications that users recognise and abide by the legal requirements associated with these rights. • Users may download and print one copy of any publication from the public portal for the purpose of private study or research. • You may not further distribute the material or use it for any profit-making activity or commercial gain • You may freely distribute the URL identifying the publication in the public portal Take down policy If you believe that this document breaches copyright please contact us providing details, and we will remove access to the work immediately and investigate your claim. Download date: 26. Sep. 2021 DOCTOR OF PHILOSOPHY Exports of Iranian Natural Gas to Regional and International Markets Elham Hassanzadeh 2013 University of Dundee Conditions for Use and Duplication Copyright of this work belongs to the author unless otherwise identified in the body of the thesis. It is permitted to use and duplicate this work only for personal and non-commercial research, study or criticism/review. You must obtain prior written consent from the author for any other use. Any quotation from this thesis must be acknowledged using the normal academic conventions. It is not permitted to supply the whole or part of this thesis to any other person or to post the same on any website or other online location without the prior written consent of the author. Contact the Discovery team ([email protected]) with any queries about the use or acknowledgement of this work. Exports of Iranian Natural Gas to Regional and International Markets: a Study of Political, Legal and Economic Barriers Elham Hassanzadeh Submitted in Partial Fulfilment of the Requirements for the Award of the Degree of Doctor of Philosophy in Graduate School of Natural Resources Law, Policy and Management, Centre for Energy, Petroleum and Mineral Law and Policy (CEPMLP) University of Dundee April 2013 i Table of Contents Table of Content.......................................................................................................................i List of Tables, Figures and Maps ........................................................................................... iv Declaration ............................................................................................................................. vi List of Abbreviations ............................................................................................................. vii Acknowledgements ................................................................................................................ xi Abstract ................................................................................................................................... 1 Part One- General Background to the Research ...................................................................... 3 1.Chapter 1: Introduction ......................................................................................................... 4 Introduction and Background .............................................................................................. 4 1.1.Importance and Objectives of the Study ........................................................................ 5 1.2.The Conceptual Background of the Research ............................................................. 13 1.3.Statement of Problems and Research Questions ......................................................... 16 1.4.Literature Review ........................................................................................................ 17 1.5.Research Methodology ................................................................................................ 24 1.6.Organisation of the Thesis ........................................................................................... 27 2.Chapter 2: A Background to Iran’s Natural Gas Industry .................................................. 29 2.1.Introduction ................................................................................................................. 29 2.2.The History of Iranian Natural Gas Industry ............................................................... 29 2.3.Iran’s Natural Gas Policy ............................................................................................ 37 2.4.Organisation of Iran’s Natural Gas Industry ............................................................... 40 2.5.Natural Gas Reserves and Production ......................................................................... 42 2.6.Natural Gas Transmission System ............................................................................... 47 2.7.Natural Gas Distribution System ................................................................................. 53 2.8.Natural Gas Domestic Consumption in Iran ................................................................ 54 2.8.1.Residential and Commercial Sector...................................................................... 55 2.8.2.Power Generation and Petrochemical Sectors ...................................................... 56 2.8.3.Industrial, Transportation and Agricultural Sectors ............................................. 56 2.8.4.Gas Re-injection into the Oil Fields ..................................................................... 57 2.9.Natural Gas Export Projects ........................................................................................ 59 2.9.1.Pipelines ............................................................................................................... 59 2.9.2.Liquefied Natural Gas (LNG) ............................................................................... 67 2.10.Natural Gas Imports................................................................................................... 71 Part Two- Diagnosis of Challenges Affecting the Development of the Iranian Natural Gas Industry .................................................................................................................................. 73 ii 3.Chapter 3- Political Challenges: International Sanctions and Politicisation of the Petroleum Sector ................................................................................................................... 74 3.1.Introduction ................................................................................................................. 74 3.2.Domestic Politics and the Impact on Politicisation of the Petroleum Industry ........... 75 3.2.1.A Historical Overview of the Petroleum Sector’s Political Sensitivity ................ 75 3.2.2. Politicisation: A Consequence of the Petroleum Sector’s Sensitivity ..................... 86 3.3.International Sanctions against Iran............................................................................. 93 3.3.1.The United States’ Unilateral Sanctions ................................................................... 93 3.3.1.1.The Iran Sanctions Act (ISA) ............................................................................ 94 3.3.1.2.The Comprehensive Iran Sanctions Accountability and Divestment Act (CISADA) ...................................................................................................................... 97 3.3.1.3.The Executive Order 13590 ............................................................................... 98 3.3.2.The United Nations Sanctions .................................................................................. 99 3.3.3.The European Union Sanctions .............................................................................. 100 3.4.The Impact of Sanctions on Iran ................................................................................ 101 3.4.1.Overall Economic Effects ....................................................................................... 102 3.4.2.The Impact on Development of Iran’s Energy Sector ............................................ 106 4.Chapter 4- Legal Challenges: The Iranian Investment Framework in the Petroleum Sector ............................................................................................................................................. 115 4.1.Introduction ............................................................................................................... 115 4.2.General Remarks on Foreign Investor-Host State Relations ..................................... 116 4.3.The Iranian Petroleum Contractual Framework ........................................................ 117 4.3.1.Origin and Background of the Iranian Buyback Contracts ..................................... 120 4.3.1.1.The Constitution .............................................................................................. 121 4.3.1.2.The Petroleum Act 1987 .................................................................................. 123 4.3.1.3.The Budget Acts and the Five-Year Development Plans ................................ 123 4.3.2.The Structure of Buyback Contracts....................................................................... 125 4.3.2.1.The Definition of Buyback Contracts .............................................................