Tehran, Baku ink energy, transport MOUs

Iran Materials 22 November 2010 10:41 (UTC +04:00)

Iran and Azerbaijan signed two memorandums of understanding on gas supplies and electricity swaps, and transportation on Wednesday.

The MOUs were inked during President Mahmoud Ahmadinejad's visit to Baku, SHANA news agency reported on Friday.

"This document envisages deepening cooperation between our countries," Azeri President Ilham Aliyev said after the signing ceremony.

"It concerns projects in gas deliveries from Azerbaijan to Iran, electricity swaps and development of railway links within the framework of the north-south international transportation corridor," Aliyev said in televised comments.

Azerbaijan supplies just over 400 million cubic meters of gas to Iran per year, in exchange for 350 mcm that Iran sends to Azerbaijan's geographically isolated region of Nakhchivan, Reuters reported.

Iran aims to complete construction of a gas compressor station by the end of this year, which will enable it to handle gas deliveries from Azerbaijan of up to 1.5 billion cubic meters per year.

Azeri supplies of gasoline to Iran were halted earlier this year after Iran said it could cover its own needs.

National Iranian Oil Company (NIOC) holds a stake in Azerbaijan's BP co-led Shah Deniz gas project in the Caspian Sea.

Wednesday's memorandum also called for the development of rail links to encourage trade between the two countries.

 Iran ready to sell gas to Europe: Ahmadinejad

Ahmadinejad said that Iran is ready to sell its gas to Europe, raising the prospect of supplying gas via the European Union backed Nabucco pipeline project in the future.

Ahmadinejad went on to note that, "Europe needs Iranian gas and we are ready to sell gas to them at an acceptable price if they want."

Iran is facing tighter sanctions imposed in June by the United Nations, United States and European Union over its nuclear program which the West believes is aimed at developing nuclear weapons.

The 7.9 billion euro Nabucco pipeline is part of the EU's effort to diversify its natural gas supplies by bringing up to 31 billion cubic meters of gas annually from the Caspian region to an Austrian hub via Turkey and the Balkans.