News - Middle East: Tehran and Moscow have signed a major agreement for the supply of gas from Russia to Iran, according to official news agencies of the two countries.

Iran’s official IRNA news agency said in a Wednesday report that the memorandum of understanding (MoU) on Russian gas transfer to Iran had been signed in a ceremony earlier in the day in the presence of Iran’s Oil Minister Javad Owji and the special envoy of the Russian Federation and CEO of Gazprom Alexey Miller.

“The signing of the MoU on Russian gas transfer is a big accomplishment and would lead to good developments on the issue of balance of energy (trade). We hope this MoU could be turned into a contract in a very short period of time,” Owji said after the agreement was signed.

He insisted that the MoU makes Iran a gas supply hub in the region, adding that the agreement sets up a framework for gas exports from Russia to Iran.

The IRNA said based on the information it had received that the agreement would enable Iran to import gas from Russia and supply it at a higher price to Iraq, Turkey and Pakistan.

Russia’s Tass news agency said that the MoU was meant to “work out organization of pipeline supplies of Russian natural gas to Iran” and will be between Gazprom and the National Iranian Gas Company (NIGC).

Russia has been facing an oversupply of natural gas since early 2022 when its exports to Europe came under sanctions because of the war in Ukraine.

Iran is the second largest gas producer in the world after Russia and has its own exports via pipelines to Turkey and Iraq.

Iran’s Acting President Mohamad Mokhber said that the MoU signed on Wednesday is extremely important for the two countries and the region.

“The Islamic Republic of Iran will be turned into a regional gas hub and a new chapter will be opened in regional and international relations,” said Mokhber in a meeting with Miller and his delegation before the gas transfer agreement was signed in the Iranian Presidency.