How will Azerbaijan benefit from gas swap with Turkmenistan, Iran? – ANALYSIS

Oil&Gas Materials 6 January 2022 09:50 (UTC +04:00)
How will Azerbaijan benefit from gas swap with Turkmenistan, Iran? – ANALYSIS

BAKU, Azerbaijan, Jan.6

By Leman Zeynalova – Trend:

On November 28, 2021, a tripartite contract on the swapping of 1.5-2 billion cubic meters of Turkmen gas to Azerbaijan through Iran per year was signed between Iran and Azerbaijan in Ashgabat, Turkmenistan, on the sidelines of the 15th Summit of the Economic Cooperation Organization (ECO).

The implementation of the contract began on January 1, 2022.

Iranian Oil Minister Javad Owji has recently said that 4-4.5 million cubic meters of gas per day are imported from Turkmenistan to Iran under the swap deal.

Ibrahim Ahmadov, deputy head of the public relations and events department at the country’s state oil company SOCAR told Trend that Azerbaijan is receiving gas under the agreement signed with Turkmenistan.

“Gas is supplied to Nakhchivan Autonomous Republic. The remaining volumes will be received near Astara. Currently, technical preparations are underway jointly with the Iranian delegation. It is planned to transport over 4 million cubic meters of natural gas to Azerbaijan per day from both directions,” he said.

Iran, Turkmenistan, and Azerbaijan gas swap deal is a win-win deal, as it's very economically beneficial for all the participating countries.

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 all three countries will all derive great benefits from this gas swap deal.

“Turkmenistan holds huge gas reserves. Turkmen proven gas reserves are the fourth-largest in the world behind those of Russia, Iran and Qatar in this order. This country intends to increase its gas exports over time and the swap agreement with Iran and Azerbaijan is an important step in this direction. The aim is to increase its export revenues thanks to these higher gas exports,” said the expert.

Perrin pointed out that Iran also has a huge gas potential but this country is often facing gas shortages in its northern provinces during the winter.

“The gas deal is a way to reduce these shortages, which have a negative impact on part of its population and of its economy,” the expert explained.

Zongqiang Luo, analyst at Norway-based Rystad Energy, an independent energy research and business intelligence company, believes that the tri-parties swap gas deal may provide more possibilities of cooperation for these two countries in energy sector.

“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 Parviz Shahbazov 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 opportunities for more gas export volume for Turkmenistan as well,” he said.

Undoubtedly, the contract will have a positive impact on the improvement of economic and political relations between the neighboring countries. The creation of energy exchange, economic exchange and expanding cooperation will contribute to stability of economic relations between the countries, and regional stability as well. The contract can create a line of economic integration between countries in the energy sector.


Follow the author on Twitter: @Lyaman_Zeyn