Azerbaijan, Iran, Turkmenistan agree gas swap deal
Azerbaijan, Iran and Turkmenistan have agreed on a deal to swap natural gas, the countries' governments announced on November 28.
The presidents of Iran and Azerbaijan were in talks in Ashgabat to discuss cooperation in the energy sector. They have agreed on a swap deal that would involve Turkmenistan transferring 1.5-2.0bn m3/year of gas to Iran and then Iran delivering an equivalent volume to Azerbaijan.
Turkmenistan is searching for new export routes for its vast natural gas reserves, estimated by BP at 13.6 trillion m3 proven. It has been trying for decades to advance pipeline projects across the Caspian Sea and to southeast Asia, but so far in vain.
Azerbaijan, Iran and Turkmenistan have swapped gas before, but this trade has been intermittent based on Azerbaijan's gas needs. Though a net gas exporter, Azerbaijan struggles with domestic gas shortages from time to time, leading it to reach out to Iran, Turkmenistan and Russia for supplies.
It has been suggested in the past that these swap deals could be scaled up to expand deliveries of Caspian area gas to Europe, via the Southern Gas Corridor (SGC). But doing so would require infrastructure upgrades in north Iran, as well as an expansion of SGC's capacity. A market test for expanding the capacity of SGC's final section, the Trans-Adriatic pipeline, failed to attract any binding bids from buyers in July.