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    Azerbaijan Halts Gas Swap with Iran

Summary

Trade ceased end-2018.

by: Dalga Khatinoglu

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Azerbaijan Halts Gas Swap with Iran

Azerbaijan has neither exported nor imported gas from Iran since December 2018, according to official statistics of th National Iranian Gas Company (NIGC).

According to NIGC’s latest monthly report, however, the swap with Turkmenistan to the Armenian enclave within Azerbaijan, the Nakhchivan Autonomous Republic (NAR) with which Azerbaijan is on a virtual war footing, continues.

Azerbaijan had a contract with Iran to deliver gas to Iran’s northern regions instead of receiving Iranian gas in Nakhchivan, taking a fifth of the throughput as a fee. This deal has halted since late 2018, statistics indicate.

Azerbaijan also signed an agreement with Turkmenistan in October 2016, which allows Iran to take Turkmen gas via its northeast borders and deliver to Azerbaijan and its Nakhchivan autonomous republic on its northwest border, deducting 15% of volume as a swap fee. This deal continues, but in a very restricted amount at 0.5mn m3/d.

US imposed sanctions on Iran’s oil exports in November and gave a 90-day waiver to Iraq to cut Iranian gas intake, though that has been extended three times and expires in a few days. However, it is not clear why Azerbaijan stopped gas swap with Iran. State-run Socar also closed its office in Tehran last fall.

NIGC’s statistics show that Azerbaijan delivered 4.1mn m3/d gas to Iran in last fiscal year, ended March 21, while Iran delivered 1.5mn m3/d to Azerbaijan and 0.7mn m3/d to Nakhchivan. Iran also swapped 3.3mn m3/d of Turkmen gas to Azerbaijan.

The swap deals are based on the Gregorian calendar and annual averages, so the quantity of received gas is not necessarily equal to the delivered volume net of fees in the Iranian fiscal year which starts and ends in March.