Tehran and Baku have taken effective steps to boost the exchange of electricity and the joint construction of a power station.
Energy Minister Ali Akbar Mehrabian made the statement in a meeting with Azerbaijan's ambassador to Iran, Ali Alizadeh, in Tehran on Tuesday, IRNA reported.
Mehrabian said Iran exports electricity to Azerbaijan in winter and imports in summer under a swap deal, and is currently synchronizing its power grid with Azerbaijan.
Although an electricity exchange scheme already exists between the two sides, “we are looking for bigger objectives by linking the two countries’ electricity networks”, he added.
Iran plans to connect its power grid to Russia through the Republic of Azerbaijan.
The two countries finalized an agreement in January to build a 280-megawatt hydroelectric power plant on Khoda-Afarin Dam on the Aras River that straddles the joint border, the construction of which is underway
Electricity experts from Iran, Russia and Azerbaijan met in Moscow in 2020 and discussed technicalities of creating an energy corridor that envisages the export of Russian electricity to Azerbaijan and Iran.
In a memorandum of understanding signed in 2015, the three sides agreed to synchronize their power grids by 2020 and pave the way for electricity trade between Tehran and Moscow.
In 2018, the three countries created a working group to chart ways of synchronizing their energy infrastructure.
The network will connect their power grids with the aim of reducing outages during the peak consumption seasons.
Iran and Azerbaijan signed a MoU in 2015 regarding the annual exchange of 700 megawatts.
Khoda-Afarin Dam
The two countries also discussed the expansion of water collaborations.
Mehrabian noted that they finalized an agreement in January to build a hydroelectric power plant on Khoda-Afarin Dam on the Aras River that straddles the joint border.
“The construction of the 280-megawatt power station is underway and equipment has been purchased and transferred to the site,” he added.
A preliminary agreement to build the facility in Azerbaijan was reached in 2019.
Khoda-Afarin is an earth-fill embankment dam, with a capacity of 1.6 billion cubic meters of water, situated on the Aras River. It is located 8 km west of Khomarlu, (capital of Khoda-Afarin County) in Iran's East Azarbaijan Province and 14 km southwest of Soltanli in Jabrayil district of the neighboring republic.
“Interactions between the two states are growing in all areas, especially energy and hopefully, incomplete plans in and around Aras River would soon become operational,” First Deputy Prime Minister of Azerbaijan Shahin Mustafayev said last year.
“Azerbaijan’s borders with Iran are borders of friendship and development,” Mustafayev stressed, noting that the timely implementation of joint agreements, such as the Rasht-Astara railroad and Khoda-Afarin power plant projects, would benefit both peoples.
Mehrabian said Iran-Azerbaijan collaboration has improved in recent years, especially in the power sector.
“In the past four years, presidents of the two countries held 12 meetings that resulted in important cooperation documents,” he added.
Energy Agreements
According to Oil Minister Javad Owji, Tehran and Baku are expected to finalize a number of energy agreements, including the joint development of oilfields in the Caspian Sea, in the near future.
The two crude producers have been developing oil and gas cooperation over the past decade. The two states signed a memorandum of understanding in 2018 for joint work on an oilfield located in the waters of Caspian Sea.
"To expand oil and gas reserves in the Caspian region, we need to reach out to international companies for funds, technology and partnership," he said.
Pointing to a preliminary agreement signed between SOCAR and the National Iranian Oil Company, the official said there is plenty of scope for energy cooperation between the two Caspian neighbors to help boost the two nation's economic development.
In 2011, Iran announced the discovery of 1.5 trillion cubic meters of gas in the Caspian Sea field named Sardar-e-Jangal off Gilan Province, whose oil in place was estimated at 2 billion barrels.
Iranian oil officials had earlier said the reservoir's development requires deepwater technology needed by Iran.
Numerous disputes have hampered the development of oil and gas production and infrastructure projects in the Caspian Sea since the collapse of the Soviet Union in 1991.
According to Azerbaijan's Deputy Energy Minister Kamal Abbasov, the country expects to increase gas production to 47.5 billion cubic meters by 2025.
Azerbaijan is keen to hike its gas production for both domestic use and future exports.
Last year, production totaled 37 bcm, Abbasov said during a webinar organized by the International Energy Forum.
