But Iran's oil ministry, which manages the Iranian National Gas Company and charged with the country's gas assets, intends to revert that trend. Tehran signed a contract with Turkey in 1996, worth 20 billion dollars, for the construction of a gas pipeline and, starting in 2002, the delivery of gas for a 25-year period. An Iranian team is also studying potential long term gas sales to China, with whom Iran enjoys warm relations. But sales to China are blighted by regional instability, in particular Iran's frosty relations with neighbour Afghanistan, one potential route to China, and next door Pakistan's own wobbly politics. Despite the fact gas prices run at a lower price than oil's, Iran is excited by the market's prospects.
Gas is a product much more certain than oil.
There are no cartels, no quotas, no dramatic fluctuations in the market. But the economist had one caveat about the gas trade. To maximise its reserves, Iran has tried to draw foreign investment to its gas fields. Initial development has begun at South Pars under the supervision of TotalFinaElf, which invested two billion dollars in the project in 1997. In return, TotalFinaElf receives a buy back, in which Tehran pays the oil company and its partners, the Malaysian Petronas and Russia's Gazprom, through the sales of thousands of barrels of condensate.