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Russia, Iran discuss oil, gas swap, investment in LNG, fields

US Rep. Ilhan Omar (D-MN) (L) talks with Speaker of the House Nancy Pelosi (D-CA) during a rally with fellow Democrats before voting on H.R. 1, or the People Act, on the East Steps of the US Capitol on March 08, 2019 in Washington, DC. (AFP photo)
Russian Prime Minister Mikhail (R) and Iran's First Vice President Mohammad Mokhber shake hands during their meeting in Moscow on Thursday, Oct. 6, 2022.

Iran's First Vice President Mohammad Mokhber has called for the Caspian littoral states to create an oil and gas cooperation committee. 

Mokhber broached the idea during the second meeting of the Caspian economic forum in Moscow.

The Iranian official said the Caspian Sea is a mutual heritage and a connection hub among its littoral states. He said countries bordering the sea need to expand cooperation in various fields.

The forum initiated in 2018 is meant to act as a platform to discuss economic cooperation, transport and security in the region. Representatives from Russia, Turkmenistan, Kazakhstan, Azerbaijan and Iran are attending the event. 

Speaking to reporters before leaving Tehran for Moscow, Mokhber said the Caspian Sea littoral states are determined to develop their relations. He said developing relations with neighboring states is one of the Iranian government's strategies.

Mokhber is in Moscow on the official invitation of Russian Prime Minister Mikhail Mishustin. In their meeting on Thursday,  Mishustin said creating comfortable bilateral business conditions between Russia and Iran amid sanctions is a "two-way road".

"We welcome the Iranian side's decision to provide comfortable conditions for Russian business. Due to the withdrawal of companies of unfriendly states from Russia, a large number of areas have been freed up in our market that our Iranian partners will be able to occupy. So it is a two-way street and they are welcome in Russia," Mishustin said.

Mokhber said Iran and Russia have good and growing relations, and the will of the two countries to comprehensively strengthen relations is serious.

He touched on the meeting of the managers of major Russian companies with the Iranian delegation Wednesday night, saying they had discussed investment in oil fields, as well as in the agricultural, financial, banking and transit and transportation sectors and decided to work out a timetable for their implementation.

The first vice president listed transportation, transit, energy and activating the North-South corridor as the most important axes of cooperation between Iran and Russia. 

He said establishing a joint bank, electrifying the Garmsar-Inchebron railway and speeding up oil and gas contracts and creating a free trade zone is among other areas of cooperation that the sides must pursue seriously.

Mokhber also touched on Iranian President Ebrahim Raeisi's order to expedite development of relations with Russia, saying the message for the enemies is that "sanctions cannot prevent the implementation of our plans".

Oil, gas swap 

Russian Deputy Prime Minister Alexander Novak said his country and Iran are working on swap oil and gas supplies, and are already working on routes and implementation mechanisms for the arrangement.  

"We are already working with them (with the Iranian side) in this direction, we are working on separate routes, mechanisms. This concerns oil and gas swaps," Novak told a briefing, commenting on the prospects of working with Iran on swap oil supplies.

Minister of Petroleum Javad Owji, who is accompanying the Iranian delegation in the visit, noted that Iran and Russia, as gas exporting countries, have already been cooperating on energy swaps, saying new MoUs will be signed for exploitation of Iranian gas fields.

The minister announced plans for joint investment for production of LNG and technologies related to gas facilities with Russia's Gazprom.

"Fortunately, good negotiations have been held with this company and other companies, with memorandums reaching $40 billion under which they will invest in our oil and gas fields and recoup the costs from production."

Owji described cooperation between Iran and Russia on developing Iran’s North Pars and Kish gas fields and increasing gas pressure in the South Pars field as “important”.

The two sides have also signed memorandums of understanding on the export of gas to Pakistan and Oman and construction of export pipelines to those countries, he sadi. 

The minister further touched on swap of oil products such as gasoline in the Caspian Sea and bartering non-oil items with oil, saying the two countries are capable of swapping 10 million tonnes of oil and non-oil products, the infrastructure for which is already in place.

He said Iran's cooperation with the Caspian states on oil, gas and energy is strategic.

“The cutoff of Russian gas exports to Europe and the change in international conditions have allowed Iran to become a bridge for the transfer of Russian oil and gas products to other countries and turn to a gas hub in the region,” Owji added.

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