Russia, Iran finalise gas pipeline route through Azerbaijan Price negotiations in final stages 

Russia's Minister of Energy Sergei Tsivilev has said that Russia and Iran have agreed on the route for the gas pipeline through Azerbaijan.

He noted that the negotiations are now in the final stage of agreeing on the delivery price. The two countries are also discussing joint gas extraction projects, Caliber.Az reports via Russian media.

"The route through Azerbaijan has been agreed. We are now in the final stages of negotiations — confirming the price. Volumes have already been fixed. Price is always a commercial matter and involves finding a compromise, which is why working groups have been set up on both sides, and specialists are developing an approach to pricing," the minister said.

Tsivilev clarified that the basic pricing solution is based on the calorific parity of oil and gas, with a certain coefficient, which the parties have yet to reconcile. 

Earlier, Russian President Vladimir Putin stated that the construction project for a gas pipeline from Russia to Iran is underway, with initial supplies potentially reaching up to 2 billion cubic metres, and the possibility of expanding them to 55 billion cubic metres in the future.

 President Putin also mentioned that Russia and Iran are discussing cooperation in the oil sector. In late June 2024, Gazprom and the National Iranian Gas Company signed a strategic memorandum outlining the development of Russian gas supplies to Iran.

The parties also discussed the immediate steps for implementing the memorandum and explored other spheres of cooperation in the energy sector. Later, the Iranian side noted that around 300 million cubic metres of gas will be supplied daily from Russia to Iran via the Caspian Sea. Based on the terms outlined in the agreement, Iran will be able to resell excess imported gas to other countries. The agreement, signed for 30 years, is expected to generate approximately $10-12 billion annually for Iran. 

Russian Deputy Prime Minister Alexander Novak said that Moscow and Tehran, along with Qatar and Turkmenistan, are discussing the creation of an energy hub, as well as swap supplies to northern Iran and the possibility of establishing an e-gas trading platform in southern Iran.

By Naila Huseynova