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Turkmenistan-Azerbaijan-Iran gas swap deal to open more possibilities of co-op – Rystad Energy

Oil&Gas Materials 1 December 2021 12:03 (UTC +04:00)
Turkmenistan-Azerbaijan-Iran gas swap deal to open more possibilities of co-op – Rystad Energy

BAKU, Azerbaijan, Dec.1

By Leman Zeynalova – Trend:

The tri-parties swap gas deal between Azerbaijan, Turkmenistan and Iran may ease the tension between Turkmenistan and Iran due to the gas debt dispute in 2017 and provide more possibilities of cooperation for these two countries in energy sector, Zongqiang Luo, analyst at Norway-based Rystad Energy, an independent energy research and business intelligence company, 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.

“Due to the gas shortage in Europe, Azerbaijan gas export volume to Italy via TAP pipeline have increased to around 24 million cubic meters per day. The Energy Minister of Azerbaijan Shahazov mentioned earlier that Azerbaijan may consider supporting the planned Trans-Caspian gas pipeline project to export Turkmenistan’s gas to Europe. Thus, the signed swap deal also open more gas export volume for Turkmenistan as well,” he said.

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 that 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.

“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.

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Follow the author on Twitter: @Lyaman_Zeyn

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