Russian President Vladimir Putin has announced plans to build a gas pipeline to Iran.

The project is intended to achieve a transport capacity of up to 55 billion cubic metres of gas per year in the medium term and further expand energy cooperation between the two countries.

Geopolitical significance

Iran has the world's second-largest natural gas reserves after Russia. However, due to US sanctions, the country has limited access to technology, which makes the development of gas exports more difficult.

Back in July 2022, the National Iranian Oil Company (NIOC) and the Russian energy company Gazprom signed a memorandum of understanding worth around USD 40 billion. As part of this agreement, Gazprom undertook to support the development of the Iranian gas fields Kish and North Pars as well as six oil fields. In addition, the company planned to participate in the completion of LNG projects and the construction of gas export pipelines.

More gas than through North Stream 1

In June 2024, Gazprom and the National Iranian Gas Company (NIGC) signed another memorandum of understanding on the supply of Russian pipeline gas to Iran. The pipeline now announced by Putin is expected to reach a capacity equivalent to the volume of gas transported to Germany via the North Stream 1 pipeline before it was damaged.

The first gas deliveries from Russia to Iran could initially amount to around two billion cubic metres per year. A route via Azerbaijan is being considered as a possible transit route, as Russia's Energy Minister Sergei Zivilev told the Interfax news agency.

Power2market will of course continue to follow the issue.