Iran-Russia Gas Deal Nears Finalization, Key Technical Hurdles Cleared
According to the Economic Desk of Webangah News Agency, Saeed Tavakoli, CEO of the National Iranian Gas Company, provided an update on the status of the major gas contract between Iran and the Russian Federation following the nineteenth Joint Economic Cooperation Commission meetings.
Tavakoli detailed significant domestic advancements in energy efficiency, noting that a knowledge-based company has achieved a 70 percent gas saving in industrial bakeries. The gas conserved in these facilities can then be redirected to the country’s power-generating sectors, serving as a key function of current energy conservation initiatives.
The official further elaborated on efficiency gains within the brick manufacturing industry. He stated that traditional methods consume approximately 300 cubic meters of gas per ton of bricks produced, whereas newer techniques, such as the roller method, slash consumption down to just 27 cubic meters per ton. This reduction substantially improves energy intensity indexes, boosts productivity, and curtails overall gas usage.
Tavakoli explained that under this framework, the user company receives a certificate for the amount of gas saved. He emphasized that this system provides multifaceted benefits: the environment profits, the utilizing company gains economic advantages, the National Iranian Gas Company benefits by diverting gas from direct combustion to value-added production, and industries see increased production alongside added value. Crucially, international energy assessments are positively influenced by the resulting improvement in energy intensity indicators.
Addressing domestic energy needs, the Deputy Oil Minister mentioned that replacing fossil fuels like firewood in gas-deficient villages harms the environment and requires management. Although 3 trillion Iranian Rials were budgeted for this sector this fiscal year, officials consider this amount insufficient. Given the current emphasis, priority for gas pipeline expansion remains focused on projects already underway.
Tavakoli also pointed out that certain cities and provinces still lack gas distribution rates commensurate with their capacity. Following directives from the Economic Council last year and reinforced by the President and the Planning and Budget Organization this year, restrictions have been imposed, and specific metrics established for determining new gas infrastructure implementation, within which the allocated 3 trillion Rials will be spent.
Regarding the strategic gas export agreement with Russia, Tavakoli clarified that the most critical elements in any export contract involve the export infrastructure and the physical delivery point. These hardware components have been examined in numerous expert sessions, and the final route has been determined in collaboration with relevant governmental bodies. Establishing the pipeline and necessary infrastructure from the point of export to the destination, or delivery point, has been settled.
Because Iran and the Russian Federation do not share a land border, relying instead on maritime links, the concept of involving a third country in the transit route was necessarily introduced, and the required infrastructure and delivery point within that context have been defined. Every proposed route has been evaluated based on its specific merits and drawbacks. Tavakoli confirmed that nearly every technical, contractual, and legal clause in the agreement has been meticulously finalized over an extended period by both Iranian and Russian teams. Only two primary areas remain pending a final mutual understanding: the price and the method of payment, for which ongoing negotiations are progressing.
