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Iran-Russia gas supply deal ‘masterpiece’ in energy diplomacy: Owji
“The masterpiece of energy diplomacy lies in the signing of the agreement on the transfer of the Russian gas to the Islamic Republic, which could lead to an economic revolution and energy security for neighboring countries in the region through Iran,” Javad Owji said on the sidelines of the weekly cabinet meeting in Tehran on Wednesday, IRNA reported.
On June 26, a memorandum of understanding on Russian gas transfer to Iran was signed during a ceremony attended by the Iranian oil minister and the special envoy of the Russian Federation and CEO of Russia’s energy giant Gazprom, Alexey Miller.
Upon turning into a contract and potential implementation, the agreement will reportedly enable Iran to import gas from Russia and supply it to Iraq, Turkey, and Pakistan.
Addressing the cabinet meeting, the oil minister provided new details of the agreement, which will transform “Iran into a gas supply hub in the region.”
“Currently, the total production of Sweet Gas from the country’s 23 refineries is around 850 million cubic meters per day. By implementing this plan, 300 million cubic meters of gas will be imported from Russia daily,” he said, adding that Russia has also agreed to cover the expenses of constructing this pipeline, as they excel in building pipelines on the seabed.
“Additionally, the transit gas pipeline from north to south via Iran is a significant development that has not been seen in Iran’s history, with annual financial transactions of 10 to 12 billion dollars,” Oil Ministry’s SHANA news service quoted Owji as saying.
The construction of this pipeline will not only guarantee a steady supply of domestic gas but also will significantly enhance the capacity and reliability of the country’s gas exports, he said.
The oil minister stated that the 30-year contract, viewed as the pinnacle of the government’s regional diplomacy, positions Iran as a gas supply hub, leading to a substantial increase in commercial transactions, economic and political security of the country.
Russia has been facing an oversupply of natural gas since early 2022 when its exports to Europe came under sanctions due to the war in Ukraine.
Iran sits on the world’s second-largest gas reserves after Russia. US sanctions have hindered Iran’s access to technology and slowed the development of its gas exports.
Gazprom has seen its gas supplies to Europe, once the source of two-thirds of its gas sales revenue, plummeting to post-Soviet lows over the conflict in Ukraine. Last year, it incurred losses of almost $7 billion, its first annual loss since 1999.