Russia Proposes Setting Up Energy Hub with Iran

Russia has suggested forming an energy hub between Tehran and Moscow, CEO of National Iranian Gas Company (NIGC) Majid Chegini said.

“Agreements have been made in this regard and expert-level talks are still ongoing between officials of the two countries”, Chegini, who is also Iran’s Deputy Oil Minister, added while addressing a news conference on August 7, Tasnim News Agency reported.

He also said that the NIGC has taken giant strides in supplying gas to almost all parts of the country in the current administration's term.

The deputy oil minister pointed to the huge volume of investment made in the gas industry in the administration of Iranian President Ebrahim Raisi, and said smartening the nationwide gas distribution network of the country is among the prioritized projects the company pursues.

He further said constructive talks have been held with countries such as Oman, Russia and Pakistan in the field of gas trade and that some European countries are requesting to import gas from Iran.

Iran’s export of gas to neighboring Iraq and Türkiye has registered a 16 percent hike and there has also been a considerable rise in the field of producing Liquefied Petroleum Gas (LPG) with the completion of infrastructures of transferring gas at South Pars Gas Field, NIGC chief said.

On July 5, Iranian Oil Minister Javad Owji said on the sidelines of the 8th OPEC International Seminar in Vienna, that Tehran positively assesses the negotiations with Moscow on the creation of a gas hub.

Earlier, Owji said that Iran, with the participation of Russia, Qatar and Turkmenistan, plans to create a gas hub in the Asaluyeh industrial area, located in Bushehr province on the northern coast of the Persian Gulf.

Russian Deputy Prime Minister Alexander Novak noted that Russia and Iran are discussing the possibility of creating an electronic gas trading platform in southern Iran. To implement this idea, it is necessary to attract partners and suppliers, find sources of supplies, one of which may be Iranian gas produced with the participation of Russian companies.

On August 3, Moscow and Tehran discussed cooperation between their special trade zones in a bid to boost commerce and investment. Russia’s Deputy Minister of Economic Development Dmitry Volvach informed the Iranian officials about the creation of the Technology and Logistics Union in Russia.

“The activities of the union are aimed at deepening trade, economic, transport and logistics cooperation between Russia and the countries of the Caspian region and states gravitating towards the North-South international transport corridor,” Volvach said.

Earlier this year, Iran and the Russia-led Eurasian Economic Union (EEU) signed a document on free trade to ensure the free movement of goods, services, capital, and workers between member states.

Cooperation between Russia and Iran has been expanding rapidly amid Western sanctions against both countries. Between January and October 2022, trade between Moscow and Tehran reached $4 billion, surpassing the figure for the whole of 2021. Russian exports to Iran surged by 27%, while imports from Tehran jumped by 10%, according to Russia’s Customs Service data.

Last year, the two countries reached several agreements, including for the purchase of aircraft equipment, and the joint construction of gas pipelines and gas field development.