The strategic importance of the gas contract between Iran and Russia

According to the exclusive report of Energy Press; Oil Minister Javad Oji explained the details of the pre-contract between Iran and Russia for importing gas from this country: According to the agreement with Russia, up to 300 million cubic meters of gas will be imported from this country daily, and we are taking a step towards the gas pole of the region. According to this 30-year contract, the surplus gas imported to our country will be exported to other countries in the region. The construction of a gas transit line from north to south through Iran is considered a very big event that has no precedent in the history of Iran and will have 10 to 12 billion dollars in financial transactions annually.

Yesterday, the “Federal City” analytical database wrote: With the construction of the gas transmission pipeline through the Caspian Sea, it will be possible to pump 110 billion cubic meters of gas per year, and close economic cooperation between Moscow and Tehran must first be established. Iranian industries consume approximately 250 billion cubic meters of natural gas, and the pipeline from Russia can supply 40% of the needs of these industries, and Iran exports a significant amount of natural gas to neighboring countries.

75% discount for Russians

According to the report of SolutiEN Institute, there is currently an infrastructure for the transmission of Russian gas to Iran through three pipelines from the two countries of Azerbaijan and Turkmenistan with a volume of 30 billion cubic meters per year. According to Iran’s oil minister, the daily purchase of 300 million cubic meters of gas from Gazprom is under consideration, which will cost Tehran 10 to 12 billion dollars per year. According to the Kommersant website, the price of gas will be around $100 per thousand cubic meters, which will be the lowest price among all Gazprom customers in foreign countries.

According to the report of News.Az Republic of Azerbaijan website; For comparison, gas prices for Europe and Turkey – Gazprom’s main export markets – average $400 per thousand cubic meters, an estimated 75% discount. In China, which buys gas through the Power of Siberia pipeline at a price of $260 per thousand cubic meters. With this account, the price for Iran will be 62% lower. Therefore, Iran’s price is actually comparable to the price paid by the Commonwealth of Independent States, which is about $100 per thousand cubic meters. If the volume of supply matches the announced values, Tehran will become one of the largest customers of Russian gas.

Of course, some experts do not consider the possibility of building a pipeline from the Caspian Sea to be profitable at this gas price. They believe that this project will face environmental and political obstacles. Earlier, Russia and Iran blocked the construction of a pipeline from Turkmenistan to Europe through the Caspian Sea, citing the need to maintain the ecological balance of the Caspian Sea. For the implementation of the new project, the approval of all the countries on the shores of the Caspian Sea is needed, which is considered a big obstacle.

Igor Yushkov said in this regard: “In fact, the construction of a pipeline from Russia to Iran in such a volume is unlikely, plans to supply a huge volume of gas to Iran seem unrealistic and most likely pursue political goals rather than economic ones.”

Mikhail Krutikhin, an oil and gas expert, also believes that a serious discussion about the agreement with Iran, which includes the construction of a pipeline along the Caspian Sea, is not logical. According to him, importing Iranian gas in such a volume is unnecessary for Russia, because this country itself has significant gas reserves, which are estimated to be around 34 trillion cubic meters or 17% of the world’s reserves. Moreover, re-export of Russian gas is unlikely; Because Iran is under sanctions and cannot launch liquefied natural gas (LNG) projects.