Russia, Iran mull concluding swap oil and gas contracts

/By AzerNews/

By Aynur Karimova

Russia and Iran have discussed the possibility of concluding swap oil and gas contracts, but a final decision has not yet been reached.

This statement was made by Russian Energy Minister Alexander Novak while talking to Russian media.

"We were discussing the possibility of concluding swap oil and gas contracts during talks with the Iranian side,” he said. “In particular, the two countries are considering a proposal of receiving the crude oil, gas and oil products from Russia in the north of Iran and supplying the equivalent volume of oil, gas and oil products produced in Iran to the Russian contractors through the ports and terminals in the south of Iran."

He said that a final decision in this regard has not been taken yet.

Novak, a co-chairman of the Russian-Iranian intergovernmental commission, who was on a two-day visit to Iran on October 21-22, also did not rule out the possibility of establishing a joint bank that will finance joint projects.

Novak has held fruitful meetings in Iran. The two countries have also signed a memorandum on the electrification of the railway line in Iran.

"The issues of cooperation in the electric power sector and the issues related to the development of rail transport are the most well developed projects for the Russia-Iran cooperation,” Novak said. “I know that a memorandum on the electrification of one of railway lines has been recently signed. In my opinion, three projects worth about $4.5 billion are being considered."

He also added that the sides discussed cooperation between the two countries in various sectors of the economy.

"Much work has been conducted in two years,” he said. “Before the sanctions are lifted, we have agreed on joint projects worth up to $40 billion."

Iran presents 121 projects worth $25 billion

Abbas Akhoundi, the Iranian Minister of Roads and Urban Development, said following a meeting with the Russian energy minister on October 22 that Russia is interested in investing in various projects.

"Iran has delivered some 121 transport projects worth $25 billion to Russian companies," Akhoundi said. "The project for the electrification of the Garmsar-Injeburun railway line will be the first project to be implemented by the Russian companies. The cost of this project is $1.2 billion."

He believes that these projects will open a new page in relations between the two countries, and this is not the only one. Iranian Energy Minister Hamid Chitchian has expressed confidence that cooperation between the two countries in the energy field will increase as well.

Following his meeting with Novak, Chitchian said that the two countries agreed to construct at least one thermal power plant and modernize one of the power plants, which Russia had already built in Iran, and synchronize electric power plants in both countries.

Chitchian also noted that the thermal power plant would be constructed possibly in Bandar Abbas, Hurmozgan province, which includes 2 units of 350 megawatts output.

Russia, Iran keen on increasing trade

Novak believes that Russia regards Iran as a big trade partner.

Speaking at a meeting with Iranian Minister of Communications and Information Technology Mahmoud Vaezi, Novak said that representatives from over 50 Russian companies operating in different areas, including oil and gas, petrochemical industry, power plants and the railway industry are accompanying him on his visit to Iran.

During the meeting between Iranian and Russian corporations, it was decided that Russia would open a $5 billion Line of Credit (LC) aimed to promote cooperation between the two countries.

The Russian minister also placed Iran-Russia trade at $1.7 billion, saying this amount could be increased several times in the future.

It is believed that Novak's visit is aimed at boosting the trade turnover between Iran and Russia to $10 billion.

Iran and Russia are at a new stage of development of partnership relations. The trade, economic, humanitarian and political cooperation between Iran and Russia has been developing on the basis of principles of friendship, mutual benefit and on good neighborly relations.

Russia was the 18th major importer of Iranian non-oil goods in the previous Iranian calendar year, which ended on March 20, with imports and exports totaling $296.509 million and $667.18 million of non-oil goods to and from Iran, respectively, according to Iran Customs Administration.

Russian companies have the potential to export machinery, equipment, transport devices, casting products, and wooden products.