Page 43 - IRANRptDec21

9.0 Industry & Sectors 9.1 Sector news
9.1.1 Oil & gas sector news
Iran, Azerbaijan and Turkmenistan sign gas swap agreement
Iran’s NIOC plans $11bn investment to expand gas output by 25%
Iran, Azerbaijan and Turkmenistan have signed a trilateral gas swap deal that covers a volume of up to 2bn cubic metres (bcm) per year, Iran’s IRIB TV and Radio Broadcasting Corporation reported on November 28. Signed in the Turkmen capital, Ashgabat, on the sidelines of a regional economic summit, the swap deal boosts an existing agreement. Under the agreement, Iran will receive gas from Turkmenistan and deliver the same amount to Azerbaijan, Iranian Oil Minister Javad Owji told Iranian state media. "Turkmenistan will sell 5-6 million cubic meters of gas per day to Azerbaijan under the trilateral agreement," Iranian state TV quoted Owji as saying.
Owji was further cited as saying that Iran was moving to resolve a gas debt dispute with Turkmenistan that began as far back as 2016. In that year, Turkmenistan claimed that Iran owed at least $1.5bn for gas it had received from Turkmenistan. Iran disputed the figure and the matter moved to international arbitration, but it remains unresolved.
"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, while not specifying a debt figure.
Iran has the world's second largest reserves of natural gas after Russia, but most of its major gas fields are located in its south, thus Iran has brought in gas from neighbouring Turkmenistan in the north since 1997 for distribution in its northern provinces. It is especially required during the winter.
The new deal was signed on the sidelines of a summit of the Economic Cooperation Organization (ECO). It members are all five Central Asian countries—Turkmenistan, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan—as well as Afghanistan, Azerbaijan, Iran, Pakistan and Turkey. “The signed document is very important. This is a historical document, it shows how deep the Azerbaijani-Iranian ties are. Azerbaijan will receive Turkmen gas through Iran. This is good grounds for trilateral cooperation. The signed document is important from the point of view of economic and energy security,” Azerbaijan’s President Ilham Aliyev said at the summit.
Iranian President Ibrahim Raisi stressed that the signed deal was aimed at developing relations between the countries involved. “In this direction, there is a need for numerous steps and this document is aimed at expanding cooperation between the countries, including in the spheres of economy, trade, transit and culture,” he said.
Iran intends to invest $11bn in its offshore fields to raise gas production capacity by 240mn cubic metres (cbm)/day, oil ministry news service Shana reported on November 11. Such a production gain would add approximately 25% to output.
Mohsen Khojastehmehr, managing director of state-owned National Iranian Oil Co (NIOC), reportedly discussed the plan on the sidelines of a visit of members of the Iranian parliament’s energy commission to a South Pars gas field refinery on the Persian Gulf coast. He added that $4bn of the planned expenditure would be spent on developing North Pars field, which could add about 100 mcm/d. There was no reference to where the funding will come
43 IRAN Country Report December 2021 www.intellinews.com