BAKU, Azerbaijan, Nov.30
By Leman Zeynalova – Trend:
The gas swap deal between Azerbaijan, Turkmenistan and Iran is a way for the countries to show that they are seriously trying to develop their economic and energy cooperation, Francis Perrin, Senior Fellow at the Policy Center for the New South (PCNS, Rabat) and at the French Institute for International and Strategic Affairs (IRIS, Paris), told Trend.
The three countries signed a deal on November 28 to swap around 1.5-2 billion cubic meters of gas per year. Gas swap from Turkmenistan to Azerbaijan via Iran will start on December 22, providing 5 Iranian provinces with gas.
“Turkmenistan holds huge gas reserves. According to the BP Statistical Review of World Energy Turkmen proven gas reserves are the fourth-largest in the world behind those of Russia, Iran and Qatar. This country is of course trying to increase its gas exports and the recent swap agreement with Iran and Azerbaijan is a new step in this direction. The gas volumes could reach 2 billion cubic meters per year or a little more (5-6 million cubic meters per day),” said the expert.
Perrin noted that Iran has a huge gas potential but this country is often facing gas shortages in its northern provinces during the winter, which is coming (the swap agreement would normally be implemented in December 2021 and beyond).
“It is also an opportunity for the Islamic Republic of Iran to develop its economic and energy relationship with its neighbors and to increase the role of the country as a possible energy hub due to its geographical position and its energy infrastructure. Azerbaijan will get 5-6 million cubic meters per day of natural gas and this swap agreement will contribute to the improvement of its bilateral relations with Iran after strong political tensions between both countries in the recent period. Previously in November Azerbaijan and Iran signed several energy agreements covering swap deals and possible joint developments of oil and gas fields in the Caspian Sea. These agreements need to become much more specific but the gas swap deal is a way for Baku and Tehran to show that they are seriously trying to develop their economic and energy cooperation,” added the expert.
He believes that the gas swap agreement is also a way to increase the visibility of the Economic Cooperation Organization (ECO) as the deal was signed on the sidelines of the 15th Summit of this organization.
“Iran also took some steps to solve its gas payments dispute with Turkmenistan. There is a great potential of cooperation between Turkmenistan, Iran and Azerbaijan and also some other countries in this part of the world. But, in order for this potential to be converted into real projects on a more important scale, some conditions will need to be met. One of the most important of these conditions is the lifting or the suspension of part of the U.S. extra-territorial sanctions covering Iran, including its energy ambitions and its willingness to work with foreign countries and companies in the oil and gas industries. The current negotiations in Vienna on Iran's nuclear program, U.S. sanctions against Tehran and the JCPOA will be very closely watched in the Caspian region,” he concluded.
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