Azerbaijan, Iran Sign Deal to Transfer Turkmen Gas

Orkhan Jalilov Feature 30 November 2021
Azerbaijan, Iran Sign Deal to Transfer Turkmen Gas

A trilateral deal on the transfer of Turkmen gas to Azerbaijan through Iranian territory was signed in the presence of the Azerbaijani and Iranian presidents, on the sidelines of a regional economic summit.

Iranian President Ebrahim Raisi and Azerbaijani President Ilham Aliyev are in the Turkmen capital Ashgabat to attend the 15th summit of the Economic Cooperation Organisation (ECO). The organization comprises Azerbaijan, Iran, Turkey, Turkmenistan, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan, Afghanistan and Pakistan.

Azerbaijan’s Minister of Foreign Affairs Jeyhun Bayramov and Iranian Oil Minister Javad Owji signed the deal after a bilateral meeting between Aliyev and Raisi, the Iranian presidential website reported on November 28.

“According to the agreement, 1.5 to 2 billion cubic meters of gas will be transported annually from Turkmenistan to the Republic of Azerbaijan through the territory of the Islamic Republic of Iran,” the report said.

Tehran will cover the gas needs of five Iranian provinces in return for allowing the gas transfer via its territories. The agreement is set to be implemented from the end of December.

Owji told reporters that "Turkmenistan will sell 5-6 million cubic meters of gas per day to Azerbaijan under the trilateral agreement".

We will soon pay the first installment to clear the gas debt that we owe to the Turkmen side, after talks that were held earlier,” Owji said, without giving the amount of the debt.

Iran was moving to resolve a lingering gas debt dispute with Turkmenistan. Ashgabat claimed in 2016 that Iran owed at least $1.5 billion for gas it had received from Turkmenistan, but Iran disputed the figure.

Iran has the world's second-largest reserves of natural gas after Russia. With most of its major gas fields located in the country’s south, Iran has imported natural gas from neighboring Turkmenistan since 1997 for distribution in its northern provinces, especially during the winter.

Azerbaijan produces enough gas to cover its own demand and to sell on the market. Azerbaijan produced 26,427.9 million cubic meters of gas in January-October 2021, which is 22% more than during the same period last year. It is possible that Baku was planning to import Turkmen gas in order to supply it further to Turkey and Europe.

During his visit to Ashgabat, the Iranian president spoke to Ilham Aliyev about the two countries' deep relations and the importance of maintaining security in the region.

"We will not allow insecurity and foreign interference in the affairs of regional countries. Experience has proved that wherever the countries resolve their issues through understanding and negotiation, the path to sedition and foreign interference will be closed," Raisi said on November 28.

For his part, Aliyev said that Baku attaches special importance to its fraternal ties with Tehran and that "we will not allow any harms to the relations". "We are committed to the security of the border areas and will not allow any country to disrupt bilateral relations," he added.

The comments by the presidents come following the recent escalation of tension that has arisen in the past several months over illegal trips of Iranian lorries to certain parts of Azerbaijan’s Karabakh (Garabagh) region, where the Russian peacekeeping forces are temporarily deployed.

In early September, Azerbaijan’s customs officials began to collect fees from Iranian cargo lorries to use the Azerbaijani section of the road between Armenia’s towns of Gafan and Gorus. On September 15, Azerbaijani border guards detained two Iranian drivers for illegally crossing into Azerbaijan from Armenia. The drivers were later handed over to Iran after Iran’s transportation authorities warned logistics companies against illegally entering Azerbaijan’s Karabakh region.