Moscow and Tehran are about to sign a memorandum of understanding to back a new gas pipeline project, according to Russian Energy Minister Aleksandr Novak.
The countries will build a 1,200-kilometer long pipeline from Iran to India with the Russian energy major Gazprom developing several Iranian deposits along the route of the future pipeline.
“The project will be implemented with the participation of Iranian, Pakistani and Indian firms,” said Novak.
The parties will work on the list of gas fields and prepare the necessary planning documentation. Construction is expected to start next year, according to the minister.
“This is a memorandum between the ministries. We have agreed to assist in the implementation of the project for gas supply from Iran to India. This is a large-scale project with Gazprom participation. The company will develop gas fields on Iranian soil with all the necessary infrastructure for gas supplies to India to be built,” Novak said.
Novak didn’t disclose how much it will cost but said it will be significant, as the pipeline will include an underwater part that will pass through the Persian Gulf.
Iran has been ramping up energy production to restore much of its lost market share since international sanctions were eased in 2015. However, decades of economic isolation and underinvestment left the country’s oil and gas infrastructure outdated.
International energy corporations took a chance to work in Iran with France's Total becoming the first to sign a deal to develop the country’s South Pars fields. The company estimated the initial investment at a billion dollars.
Royal Dutch Shell, Italy’s Eni, and Russia’s Rosneft are among more than 30 foreign companies that have qualified for oil and gas projects in Iran since sanctions were lifted.
American corporations are prohibited from working in the Islamic Republic except through foreign subsidiaries.