Consequences of Iran-Russia gas contract

According to Energy Press; According to official announcements, Iran’s President Masoud Mezkiyan will visit Moscow on November 1, where good agreements are expected to be reached in the field of expanding economic relations. Of course, this year, the two countries have reached an agreement on the import of gas from Russia, which can have important national and even global consequences. In fact, recently there has been a significant development in energy cooperation between Russia and Iran, and Iran’s plan to purchase a significant amount of natural gas from Gazprom – 300 million cubic meters per day – is in line with this. This agreement, worth 10 to 12 billion dollars per year, is a new era in the energy relations of the two countries and can have wide consequences for the global gas market.
This document was signed at the end of June of this year and in the framework of the visit of the Gazprom delegation led by Alexey Miller, the chairman of the board of directors, to Iran. But it should be noted that this is not a binding contract, but only a memorandum for now. The parties are soon to sign an executive agreement for a period of 30 years, which will allow Russia to make up for part of the decline in the European market and turn further to the East.
According to analysts and unofficial statements, the price of export gas for the Islamic Republic will be around $100 per thousand cubic meters. This is an unprecedented low price for Gazprom customers in non-CIS countries. In comparison, European countries and Turkey, which until recently were Gazprom’s main export markets, pay an average of $400 per thousand cubic meters. Even China, which is considered a friendly country, buys Russian gas at a price of around 260 dollars per thousand cubic meters. Therefore, with a daily volume of 300 million cubic meters, the annual supply volume will be about 109.5 billion cubic meters.
Moscow’s view of the Delhi market
Moscow and Tehran are considering the possibility of exporting more gas. This will help Russia to enter the Indian gas market in the future and will also facilitate gas negotiations with China. It should be noted that Iran has enough of its own gas, but its production is concentrated in the south of the country and a significant share of consumption is in the north, and Gazprom can participate to some extent in supplying gas to the northern regions of Iran, and Iran exports gas to the south. slow In fact, the contract between Iran and Russia should be a swap method.
According to the statements, the gas pipeline along the Caspian Sea is to be built with a capacity of approximately 110 billion cubic meters per year, which is more than the total capacity of the two Nord Streams and is comparable to the volume of Gazprom’s exports to Europe by 2022. The supply in such a volume will cover approximately 45% of gas consumption in Iran.
Of course, the Iranian market does not need this amount of gas, the announced supply volume is up to 300 million cubic meters. In this case, we can talk about entering the market of neighboring countries, primarily India. This country has the largest population in the world and the purchase of gas will always grow, so the construction of a gas pipeline from Russia to Iran at the bottom of the Caspian Sea in the future can be evaluated as a joint effort between Moscow and Tehran to enter the Indian market.
It should be noted that this would require transit through Pakistan, which would probably become a rather difficult geopolitical task, as the United States has a very strong influence in the country, and this was quite evident in the issue of the peace pipeline. But an alternative route could be an underwater gas pipeline, where there was such an agreement in the past, but this project has not yet been completed and there is no information on its implementation date.