Azerbaijan renews gas swap deal with Iran

Azerbaijan has extended its gas swap agreement with Iran for supplies to the Nakhchivan Autonomous Republic, this time incorporating Turkmen gas into the scheme, two energy sources said.

Under the original 2005 agreement, Azerbaijan delivered gas to Iran via Astara, and Iran pumped gas to Nakhchivan through Julfa, with daily volumes reaching up to 6 mcm.

The 20-year contract expired this year but was renewed on a medium-term basis under softer terms. Under the new deal, Nakhchivan will receive up to 1 mcm per day. Iran receives Turkmen gas, part of which is consumed domestically and part redirected to Nakhchivan, while Azerbaijan compensates volumes through its Astara compressor station.

Since March 2025, Nakhchivan has also been supplied via the new Igdir (Turkey)–Sadarak (Nakhchivan) pipeline, significantly boosting energy security.

For Iran, such swaps are strategically important. Earlier this year, it agreed with Turkmenistan to transit up to 4 bcm annually to Turkey’s BOTAS via an idle export pipeline.

For Turkmenistan, the deal opens a western export route, albeit modest in volume, while Turkey strengthens its role as a regional gas hub. Azerbaijan’s participation creates an additional layer of interconnection among Turkmenistan, Iran, Azerbaijan and Turkey, based on mutual benefit and support.

N.Tebrizli