The volume of natural gas swapped between Iran and Turkmenistan soared by 385% in 2022 compared to the previous year, the managing director of the National Iranian Gas Company said.
“NIGC’s revenues via swap operations also grew by 530% during the period,” Majid Chegeni was also quoted as saying by ISNA.
In December 2021, Tehran signed a gas swap agreement with Ashgabat and Baku, based on which NIGC delivers 2 billion cubic meters of Turkmen gas to Azerbaijan annually, he added.
Under the swap deal, NIGC receives gas from Turkmenistan, located to the east of the Caspian Sea and delivers an equivalent volume to Azerbaijan on the western side of the sea at the Astara border.
Turkmenistan sells 6 million cubic meters of gas per day to Azerbaijan, according to the trilateral agreement.
Chegeni noted that as per the new deal between Turkmenistan and Azerbaijan, NIGC is expected to boost gas import from Turkmenistan by at least 70% in 2023.
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, he added.
Although Iran has major natural gas fields in the south, it has imported gas from Turkmenistan since 1997 for distribution in its northern provinces, especially during the winter.
According to the NIGC chief, Iran has the largest high-pressure gas pipeline network after Russia and 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.
Temporary Halt
Turkmenistan used to send nearly 5 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 countries managed to settle the row out of court, as officials in Tehran signaled their willingness to put aside differences with the neighboring state.
Considering its large-scale access to equipment and pipelines, Iran’s Oil Ministry has made it clear that the government is keen on resuming swap operations with northern neighbors.
According to Iran’s Oil Minister Javad Owji, NIGC and Russia’s oil and gas giant Gazprom will soon finalize a natural gas swap deal in Moscow, as fruitful talks have been held between the two sides.
Negotiations to swap other petroleum products are yet to come to fruition, he added, noting that NIGC has the infrastructure for increasing gas import and swap with neighboring countries to 15 billion cubic meters per year.
Owji said the implementation of the swap deal with Russia will encourage other countries in the region to sign similar contracts and use Iran’s capacities.
The deal with Gazprom will also be a big step for Iran, as it would ensure a stable gas supply to the country’s northeastern regions, which are far away from the sources of natural gas in the country.
According to Owji, Iran is willing to swap oil and gas from Caspian Sea littoral states, provided that Russia, Azerbaijan, Kazakhstan and Uzbekistan also take measures and cooperate with Iran.
“Ties between Iran and Russia have been growing in recent years in political, economic, trade and energy fields,” he added.
NIGC’s data show that the company’s exports in 2022 increased by 10% and 79% in terms of volume and revenues respectively compared to 2021.
Statistics also indicate that NIGC’s liquefied petroleum gas sales rose by 32% in 2022, helping the firm raise its revenues by 57%.
Iran ranked third in terms of gas production in 2021, after the US and Russia, with 256.7 billion cubic meters, according to BP’s latest annual statistical review of world energy.
The report shows that Iran’s production increased by 3.1% in 2021 compared to its output in 2020, IRNA reported.
With 256.7 bcm of gas output, Iran’s share of the world's natural gas production in 2021 was 6.4%.
In the past decade, natural gas production in Iran has grown by an average 5.4% annually, which is more than twice the global average growth. The world's natural gas production has grown by an average of 2.2% per year in the 10-year period.
