Russian energy giant Gazprom has entered into a memorandum of understanding with Iran’s National Iranian Gas Company (NIGC) to supply Russian pipeline gas to Iran. The agreement was signed on Wednesday during a visit by Gazprom CEO Alexei Miller to Iran, with details of the memorandum remaining undisclosed.
Iran, possessing the world’s second-largest gas reserves after Russia, has been a target for Moscow’s expansion into the natural gas market. However, international sanctions have restricted Iran’s access to technology and hampered the development of its gas exports.
Gazprom has witnessed a significant decline in its gas supplies, once accounting for two-thirds of its sales revenue, falling to post-Soviet lows in the wake of the Ukraine conflict. The company recorded a loss of nearly $7 billion last year, its first annual loss since 1999.
In July 2022, Gazprom signed a memorandum of understanding on energy cooperation with Iran’s National Iranian Oil Company (NIOC), valued at approximately $40 billion. However, this agreement has yet to yield any concrete deals.
Under the terms of the 2022 agreement, Gazprom was expected to assist NIOC in developing the Kish and North Pars gas fields, along with six oil fields. Gazprom was also slated to participate in the completion of liquefied natural gas (LNG) projects and the construction of gas export pipelines.