Iran, Turkmenistan And Azerbaijan Sign The Gas Swap Deal

17^th December 2021

Trying to prevent the development of oil-gas-centric economic relations is one of the long-term strategies of competitors to weaken Iran’s position in the region. The report which has been published by one of the newspapers in the Middle East; “This agreement is important and could give Iran more power over Central Asia and bring Iran closer to Turkmenistan and the Republic of Azerbaijan.” “this gas-swap contract is not just some million cubic meters of natural gas. It is a major shift of powers and collaborative merits among the regional governments to reinforce their trade union and strategic alliance more.” “Implementation of this agreement could have major consequences in the coming years.”

In line with the development policy of “neighbourhood relations”, we have witnessed the conclusion of a “gas swap” agreement between the Islamic Republic of Iran with the two countries of Turkmenistan and Azerbaijan. “Gas swap” transactions mean that the government or the private sector receives gas at one border-point from one of the neighbouring countries and delivers the specified amount to the individuals, companies or country at the other border-point.

Therefore, the gas swap is a completely different matter from the transit of gas through the pipeline. 

The Articles of the Contract

According to the contents of the contract that was signed and approved of by the governments of three countries: Iran, the Republic of Azerbaijan and Turkmenistan, in the 15th summit of ECO, Turkmenistan will be selling 5 to 6 million cubic meters of natural gas (equal to 1.5 to 3 billion cubic meters per year) to the Republic of Azerbaijan which will be supplied by Iran to this country.

In other words, Iran will be supplied for its own domestic natural gas consumption from Turkmenistan in Sarakhs and will supply the same equal amount of natural gas to the Republic of Azerbaijan in Astara from the domestic supply-lines of Iran’s natural gas, equivalently.

This contract will be commenced and operated from the first of month Dey for an unlimited period.

The Importance and Merits of Gas-Swap

The gas-contract amongst Iran-Azerbaijan-Turkmenistan is a win-win deal.

The importance of it shall be considered with its achievements for the three countries individually, including for Iran.

As an overview, aside from its economic advantages, it increases the multilateral collaborations and closeness of these three countries and beyond that with other countries regionally. This will be welcomed and applauded regionally as well in other countries for its pledge of prosperity and cooperation.

This contract economically and politically has the following merits for the Islamic Republic of Iran:

The economic advantages:

Easing and facilitating the procedure of transforming Iran to the centre of energy in the region.

Eradication of troubles regarding the supply of natural gas for the five northern and north-eastern provinces of Iran.

Re-starting the gas-deals with Turkmenistan afresh after five years of hiatus.

Expansion of regional cooperation with the neighbouring countries.

Encouraging domestic and global investments.

Expanding the relevant trades domestically and financial interactions.

Possibility of deploying the natural-gas pipeline of Tanap (The Trans-Anatolian Natural Gas Pipeline) that interlinks the gas field of Baku Shah Deniz to Turkey and Europe via Tbilisi and Erzurum.

The political advantages:

Fortifying the political interactions of Iran with Turkmenistan and the Republic of Azerbaijan.

Increasing the bargaining power in regional dealerships and global stance.

Enhancing and reinforcing the political influence and potency of Iran over the countries of Caucasus and central Asia.

Besides, this contract will add to the strategic benefits of Iran such as Lajervard axis (the Lapis Lazuli Transit, Trade & Transport Route Agreement) that interlinks Afghanistan to Europe, and Iran had been previously omitted from this axis of interest intentionally.

This agreement will lead to regional peace and increase trust between governments and nations. Since gas can be a factor in regional stability and security, it is hoped that the new Iranian government’s oil diplomacy will achieve its predetermined goals.