Iran is ready to start gas swap with Turkmenistan to increase gas exports to Armenia, Oil Minister Javad Owji said.
In a meeting with Armenian Minister of Territorial Administration and Infrastructures Gnel Sanosyan on Monday, Owji said talks between the two sides were positive and constructive, the Oil Ministry’s news agency Shana reported.
“Negotiations for gas swap from Turkmenistan to Armenia through Iran have started and will soon achieve good results due to the high capacity of Iran’s gas distribution network,” he added.
Ties between Iran and Armenia have been growing in recent years in political, economic, trade, cultural and tourism fields.
A 20-year contract was signed by the two countries in 2004 and took effect in mid-2009, based on which Iranian natural gas is bought by Armenia for generating electricity that is exported to Iran.
Tehran receives 3.2 kilowatt-hours of electricity in exchange for 1 cubic meter of natural gas.
Iran is connected to Armenia through two electricity transmission lines and a third is under construction. The two countries have different seasons of peak electricity demand. Iran exports electricity to Armenia in winter and imports in summer.
Iran's electricity exchange with Armenia will increase fourfold to 1,200 megawatts when the construction of the third power transmission line is complete.
Armenia imports polymer raw materials, petrochemicals, iron, steel and natural gas from Iran.
Good Infrastructure
Iran has the infrastructure for increasing gas import and swap with neighboring countries to 40 million cubic meters per day, or 15 billion cubic meters per year, the minister had said before.
Iran has started transferring 5 mcm of natural gas per day (2 bcm per year) of Turkmenistan, located to the east of the Caspian Sea, to Azerbaijan, on the western side of the sea, based on a trilateral agreement reached last November.
Several rounds of talks have already taken place between Iran and Turkmenistan, focusing on the development of energy cooperation.
Of the total volume of gas received from Turkmenistan, about 20% are Iran’s share as swap fee and the rest is delivered to Azerbaijan.
Swap Advantages
Iran has major natural gas fields in the south but has imported gas from Turkmenistan since 1997 for distribution in its northern provinces, especially during the winter.
Experts believe that the swap deal with Turkmenistan could encourage other countries in the region to sign similar deals and use Iran’s gas supply capacities.
Having the largest high-pressure gas pipeline network after Russia, Iran can play a key role in transferring gas from east to west.
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 more buyers for its natural gas riches other than China.
Turkmenistan 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.
The two nations managed to settle the row out of court, as officials in Tehran signaled their willingness to put aside differences with the neighboring state.
Considering the large-scale access to equipment and pipelines in the country, the Oil Ministry has made it clear that the government is keen on resuming swap operations with northern neighbors.
According to the ministry’s website, Iran is willing to start swapping oil and gas from Caspian Sea littoral states, provided Russia, Azerbaijan, Kazakhstan and Uzbekistan take reciprocal measures and cooperate with Iran in this regard.
