Exporting gas through pipelines can help strengthen ties between countries, as the resulting interdependence helps establish better relations with neighboring states, said the deputy director for gas marketing and operations at the International Affairs Department of the National Iranian Oil Company.
“While Iran’s energy sector has been hit by US sanctions in recent years, our gas was almost excluded because buyers of Iranian gas asked for waivers so that they could buy natural gas from us. As a result, Iran continues to export gas to Turkey and Iraq as they are excluded from the sanctions,” Mehran Amirmoini was quoted as saying by the Oil Ministry’s news agency Shana.
In December 2021, Iran signed a gas swap agreement with Turkmenistan and Azerbaijan, which took effect last month. Based on the deal, Iran delivers 1.5 to 2 billion cubic meters of Turkmen gas to Azerbaijan annually.
Under the swap deal, NIOC receives gas from Turkmenistan, located to the east of the Caspian Sea and delivers an equivalent amount to Azerbaijan, on the western side of the sea, at the Astara border. Turkmenistan sells 5-6 million cubic meters of gas per day to Azerbaijan, according to the trilateral agreement.
Turkmenistan has been exploring options on gas swap deals with Iran to export its fuel to markets further afield. Because of economic challenges, Turkmenistan has been seeking to find more buyers for its natural gas riches other than China.
The country used to send nearly 6 million cubic meters of gas to Azerbaijan through Iran up until 2017 when it was brought to a temporary halt due to a row with Iran over unpaid gas bills.
Any activity that helps generate income for the country, however small, is a positive step. In signing this contract, what is more important and gets less consideration is ‘trade’
However, the two nations managed to settle the row out of court and started the gas swap again.
Some say that the new contract is not very significant, as the volume of the swapped gas is not high. However, others like Amirmoini say, “Any activity that helps generate income for the country, however small, is a positive step. In signing this contract, what is more important and gets less consideration is ‘trade’.”
The official noted that ascooperation has resumed, further opportunities may arise such as gas swap between Turkmenistan and Kuwait through Iran.
“We could receive Turkmen gas and transport it to Kuwait and there will be no need to build a new pipeline since we have an extensive gas grid in the country,” he said.
Oil and gas swap can be an important source of revenue, as the northern neighbors with abundant hydrocarbon resources need access to the sea in the south.
Experts believe that the implementation of the swap deal could encourage other countries in the region to sign similar deals and use Iran’s capacities in this regard.
Having the largest high-pressure gas pipeline network after Russia, Iran can play a key role in transferring gas from east to west of Iran and neighboring countries.
The Oil Ministry has announced that Iran is willing to start swapping oil and gas from Caspian Sea littoral states, provided Russia, Azerbaijan, Kazakhstan, Turkmenistan and Uzbekistan equally take measures and cooperate with Iran in this regard.
Regarding gas export, Amirmoini said, “Iraq and Turkey are our first and second priorities and we will do our best to keep these markets. We also have an agreement with Pakistan and we should start our negotiations with the eastern neighbor to revive the contract. Apart from the neighbors, there are more distant markets like China or India and even European countries, which we can consider.”
The contract to export Iranian gas to Pakistan was signed in 2009. More than two decades have passed since Iran began negotiations to export gas to India and Pakistan through what was known as Peace Pipeline. Four years after the signing of the contract, a groundbreaking ceremony was held for the construction of the pipeline.
Iran had already built more than 1,100 kilometers of the pipeline on its own territory at that time.
Although Iran has shown its determination to export gas to Pakistan, the Pakistani side has withdrawn from the deal on the pretext of financial constraints. Up until now, no attempt has made to implement the contract.
