Russia will pay for most of the construction of a gas pipeline to Iran via Azerbaijan
Russia will take on the bulk of the costs of building a gas pipeline that will connect it with Iran through the territory of Azerbaijan.
Iran's ambassador in Moscow, Kazem Jalali, said this in an interview with the newspaper Vedomosti.
"The financing will largely come from Russia. But we are all working together on this project — all three countries: Russia, Iran and Azerbaijan," the diplomat explained.
The pipeline route was agreed upon in early 2025 and has not changed since then — the pipe will run through Azerbaijan. At the outset, the capacity will be about 2 billion cubic meters of gas per year, but the parties agreed in advance on their readiness to increase volumes to 55 billion. According to Jalali, a foundational document has been signed and about 90% of the issues related to the transit of Russian gas have been settled.
The project envisages both the restoration of existing gas pipelines and the construction of new branches.
The gas pipeline partly relies on Soviet infrastructure. At the first stage, it is planned to use two existing trunk gas pipelines: "Mozdok — Kazi-Magomed," connecting Russia and Azerbaijan, and "Hajiqabul — Astara — Abadan" between Azerbaijan and Iran (the Iranian section is the IGAT-1 pipeline, built in the 1970s to supply Iranian gas to the USSR; now it is planned to be used in the reverse direction). To increase volumes beyond the initial 2 billion cubic meters, new sections will have to be built.
In June 2024, Gazprom and the National Iranian Gas Company (NIGC) signed a strategic memorandum on examining supplies of Russian gas. In January 2025, during the visit of Iranian President Masoud Pezeshkian to Moscow, the route through Azerbaijan was officially agreed upon. Vladimir Putin then stated that volumes could grow to 55 billion cubic meters per year, but that it was necessary to start with small batches — up to 2 billion. Russian Energy Minister Sergei Tsivilev specified that the talks are at the final stage — the parties are negotiating the price.
In April 2026, Jalali spoke of a "hybrid" financing model — with the participation of major Russian energy companies and settlements in national currencies. In July 2026, the head of Russia's Energy Ministry visited Iran, where Tehran demanded that the signing of the final agreement be accelerated.
