Today comes into force a trilateral agreement on trade in natural gas between Turkmenistan, Azerbaijan, and Iran.
Report informs that the agreement provides for the sale of 1.2-2 billion cubic meters of natural gas from Turkmenistan to Azerbaijan via Iran. Turkmen gas will be sold on the northern border of Turkmenistan and Iran and exchanged for an equivalent amount of Iranian gas on the Iranian-Azerbaijani border. The contract is open-ended.
Turkmenistan will sell 5-6 million cubic meters of gas per day to Azerbaijan in accordance with the trilateral agreement.
Turkmen gas is important for supplying energy to the northern provinces of Iran, which have limited access to the country’s southern gas fields. However, because of this, Tehran owes Turkmenistan $1.8 billion for gas supplies. Iran, benefiting from the development of regional infrastructure, transport, and shipping as a result of the deal, will now begin to pay off its debt.
Iran is expected to start making payments to Turkmenistan soon. Since they are likely to benefit from the deal, Tehran is unlikely to take any action to jeopardize it. In the short term, the deal will strengthen Iran’s relations with both countries, giving Iran more influence in Central Asia. In the medium to long term, if the deal goes through, Iran is likely to be able to connect to many large transport pipelines.
Iran has large natural gas fields in the south, but since 1997 has been importing gas from Turkmenistan for distribution in its northern provinces, especially in winter.
