The Fate of the Thirteenth Administration’s Memorandums; Ambitions That Failed to Materialize With the Russians

As the cold season begins in Iran, forecasts indicate a daily gas deficit of 350 to 400 million cubic meters. With such a severe shortfall, it is likely that—following past patterns—more than 70 percent of gas production will again be allocated to household consumption, leaving industry and power plants without supply.

According to Rokna, options for importing gas from neighboring states to meet the needs of northern provinces appear to be blocked. Last winter, Turkmenistan halted gas exports to Iran due to Iran’s prolonged delays in payment, even demanding late-payment penalties.

This spring, once again, discussions emerged about a new gas import agreement with Russia. However, considering current political and international dynamics—and the realities of the global energy economy—it appears unlikely to be useful or effective. The imported gas would have to enter Iran either through Azerbaijan—which resists the option on geopolitical grounds due to its cooperation with Israel and Turkey—or through Armenia and Georgia, whose strained relations with Russia and Iran make the route seem unfeasible. Alternatively, a pipeline could be constructed across the Caspian Sea floor, a project requiring several years and nearly six billion dollars, rendering it economically unjustifiable.

The Unfinished Gas Memorandum of the Thirteenth Administration

Throughout the Thirteenth Administration, repeated reports emerged regarding the signing of numerous memorandums on gas cooperation with Russia. In May of this year, another gas memorandum was mentioned. Oil Minister Mohsen Paknejad announced that a previous memorandum for the annual import of 55 billion cubic meters of gas from Russia had been signed, stating that necessary reviews of transmission routes had been completed, ultimately leading to an agreement to use a land route through the Republic of Azerbaijan.

The Oil Minister even explained that Russian gas would be delivered to Iran in the Astara region. “Necessary coordination between Russia and Azerbaijan is underway, and this project will have a second phase that will be finalized in the future,” he said.

Prior to this, Kazem Jalali, Iran’s ambassador to the Russian Federation, had said Tehran hoped Russian gas would begin flowing to Iran through Azerbaijan in the near future. He noted that “we are now negotiating with Gazprom and almost all issues have been resolved,” adding that both sides still needed to agree on the price of Russian gas.

Earlier still, Russian Energy Minister Sergei Tsivilev had announced during the eighteenth meeting of the Iran-Russia Joint Commission that the supply of Russian gas to Iran via existing infrastructure in Azerbaijan would begin this year, planning for exports of up to 1.8 billion cubic meters annually.

Initial discussions date back to former Oil Minister Javad Owji, who on June 26, 2024, referenced a memorandum between Iran and Russia, stating: “Iran and Russia hold more than 60 percent of the world’s gas reserves, and this cooperation memorandum is an important development. It will undoubtedly create positive energy-sector changes in the region. Besides, Iran, with its nationwide gas transmission infrastructure, is fully prepared to receive this volume of gas (55 billion cubic meters per year).”

The previous administration promoted this agreement by highlighting several factors: first, that energy security—especially during cold seasons—would be improved for northern provinces, eliminating concerns within the Oil Ministry about meeting regional gas demand. Second, that Iran, due to its extensive pipeline network, could become the gas hub of Southwest Asia and a major transit route amid Russia’s isolation due to Western sanctions. Third, that the memorandum offered an alternative means for Iran to generate revenue under Western sanctions.

Unrealistic Expectations of Transit Through Azerbaijan and Inertia From Both Parties

In this context, the former Oil Minister, in the final days of his tenure, announced the signing of an agreement for transferring Russian gas to Iran through the Caspian Sea. Owji stated that “with the implementation of this project, 300 million cubic meters of gas per day will enter Iran, and Russia has agreed to cover the cost of building the seabed pipeline.”

Soon after, however, negotiations shifted toward Azerbaijan as the more economical route. Reports even indicated that Azerbaijan would participate, receiving Russian gas and then transiting it to Iran.

However, considering international conditions and Azerbaijan’s political posture, it is clear that Baku has no real intention of cooperating. In fact, neither the Iranian nor Russian sides have yet demonstrated willingness or commitment to begin implementing the necessary infrastructure. Some officials argue that Russia has expressed readiness to fund infrastructure inside Azerbaijan, yet no positive signals have come from Baku.

Some experts argue Russia, not Iran, proposed the Azerbaijan route, suggesting it may not serve Iran’s interests. Russia’s 120-billion-cubic-meter export capacity remains underutilized due to the Ukraine war, while the Mazdok–Baku pipeline has only 10-billion-cubic-meter annual capacity and, due to aging infrastructure, only 20 percent of that is operational. Hence Russia needs additional export routes.

Meanwhile, Azerbaijan is itself a serious competitor to Iran in gas production and aspires to become a regional gas hub. It is actively extracting Caspian oil and gas and sending it to Turkey and Europe. Thus, it is illogical for Iran to tie its energy security to a rival aligned with Iran’s regional competitors.

Examining the Three Transit Options

Ehsan Movahedian, an international affairs expert, notes that cooperation with Russia in energy is fundamentally sound, because any gas imported would help offset part of Iran’s deficit.

He states:
“We have unfortunately under-invested in gas, and the northern provinces have always faced challenges in supply. At one time this gas was provided by Turkmenistan. Gas swaps also generate revenue for us. Though the prudent approach is to diversify energy sources and avoid reliance on a single supplier. China and Russia are close, yet China does not rely solely on Russian energy. Furthermore, not all Russian gas is meant for us; some of it is intended for re-export from Iran to certain Arab states in the Gulf or to Pakistan. Iran’s role is largely transitory. This economic interconnection can also foster political, economic, and security convergence. We need stronger alignment with Pakistan, especially as Azerbaijan and Turkey seek to pull Pakistan into their orbit.”

However, he argues that a group within Iran continually promotes dependency on Azerbaijan, insisting that all transit routes—including those to Europe—should go through Azerbaijan and Nakhchivan rather than Armenia. The same group insists the Russian gas route pass only through Azerbaijan and not Turkmenistan or Armenia-Georgia.

Movahedian outlines three possible routes. First, Turkmenistan is unwilling to cooperate with Russia because Russia has saturated the gas market, preventing Turkmenistan from exporting gas to China. In addition, the pipeline connecting Turkmenistan to Iran is expected to be expanded for future gas exports to Iraq, eliminating spare capacity for Russian gas.

The second route is via Azerbaijan, but several problems exist: Iran and Azerbaijan have no existing pipeline between them, meaning a new one must be built; this route is longer than the Armenia-Georgia route; and Azerbaijan might receive Russian gas and then re-export it—possibly to Europe—by relabeling it as “Azerbaijani gas.” “They cannot be trusted,” he says.

The third route:
“We have pipeline routes from Russia to Georgia, Armenia, and Iran. With certain technical modifications, this route can be reversed, bringing gas into Iran instead of sending it northward. The distance from the pipeline to Tabriz is only 140 kilometers. If no pipeline exists from the Azerbaijan border to the target areas, it must be built. We must diversify routes—in both gas and transit corridors.”

He argues that relying solely on Azerbaijan allows Baku to pressure Iran by cutting access. Regarding the rail corridor, he states:
“If the plan is to connect Iran to Nakhchivan and then to Armenia, we still lack a direct route. In constructing the Aras corridor, we should include both rail and gas pipelines to ensure reciprocal dependency. If Azerbaijan seeks to make us dependent, we must ensure they depend on us too.”

Asked whether Armenia remains a reliable partner despite warming ties with the West, he responds:
“Everything is still on paper. No such route has been constructed, nor has any plan to supply Armenia and Azerbaijan’s energy been operationalized. We still have time. Until these projects materialize, we must strengthen Armenia’s dependency on us. For more than two decades, we have discussed constructing direct rail connectivity with Armenia, a broad transit corridor, and the Karagan tunnel. The establishment of refineries and fuel infrastructure in Syunik has also been proposed. Had we implemented these projects, Armenia would have had no reason to seek ties with the U.S., or rely on energy from Baku and Turkish economic integration.

If Armenia is turning westward, our inaction is partly to blame. A lack of strategic vision and leadership has allowed others to fill the gaps. This is dangerous for us; it makes us irrelevant and reduces our strategic value, as others no longer rely on our oil, gas, or transit routes.”

Georgia Cannot Be Relied Upon

Ali Ziaei, head of Iran’s Transportation Think Tank, says the greatest concern about the Armenia-Georgia route is not Armenia but Georgia. Georgia has deep disputes with Russia, views Russia as an occupier of roughly 20 percent of its territory, and tensions have only increased recently.

“As a result, we do not have reliable transit through Georgia to Russia. Georgia has issues with Russia, its own issues with us, and is aligned with NATO. Thus this route is not dependable—particularly in energy, a more sensitive sector.”

He recalls that during the previous administration, Iran and Russia discussed a Caspian seabed pipeline, but negotiations yielded no results. “The reasons for failure remain unclear, but our officials stated Iran would not build the entire pipeline due to excessive cost. Yet some analysts believed the project was strategic enough to justify the investment.”

Imports Not Logical—Except Through the IGAT Route

Energy expert Nersi Ghorban explains:
“Iran holds the world’s second-largest gas reserves. Therefore, gas imports from Russia can only be considered a temporary measure. Whenever Iran chooses—and when international conditions improve—major global oil and gas companies will return, making imports unnecessary.”

He notes:
“The idea stems from the existence of an old pipeline—IGAT 1—built before the revolution, stretching from Bidboland to Azerbaijan and Russia. At that time Iran exported gas to those regions, and Russia in return helped develop Iran’s steel industry. Since the pipeline exists, theoretically, it can be reversed for temporary imports, requiring only moderate refurbishment.”

Ghorban argues that constructing a pipeline across the Caspian seabed is vastly expensive and economically unsound.
“The seabed pipeline would alone cost around three to four billion dollars, and with compressors and related infrastructure, perhaps five to six billion, requiring at least three to four years. It is not logical given the uncertainties.”

He stresses that Russia has little incentive to rely on Iran as a transit route. “Russia sends most of its gas to China through northern routes. China is a critical, high-value customer. But what would Russia gain from exporting gas through Iran? Gulf Arab states do not need gas; Qatar has vast reserves. The UAE, once interested, now buys from Qatar. Iraq has its own gas resources. There is no viable market around Iran that justifies such large Russian investment.”

Regarding obstacles to reversing the old Iran-Azerbaijan-Russia line, he says:
“We do not know the internal technical issues within the Oil Ministry. That pipeline, 42 inches wide from Bidboland to Russia, is likely not in ideal condition. But we previously used similar lines to supply gas to Armenia. It is possible that parts of the system still function, though I am unaware of its current status.”