The Iranian ambassador announced a "hybrid" mechanism for financing the gas pipeline from Russia

Alexey Belogoryev, Research and Development Director of the Institute for Energy and Finance, commented to the Vedomosti newspaper on the prospects of building a gas pipeline from Russia to Iran through Azerbaijan.

Judging by the proposal of "hybrid financing" involving funds from Russian companies, Iran is not ready to pay for the construction of the gas pipeline itself, Alexey Belogoryev says. He is convinced that Tehran was not ready to spend its funds even before the start of the war, and now, when it has been going on for almost two months, it is all the more waiting for an investment proposal from Russia.

"A joint venture will probably be officially established, and all payments will be made in rubles and rials," Belogoryev says.

Iran's need for a gas pipeline has increased due to the current war in conditions of high vulnerability of the internal infrastructure for production and processing, the country needs backup sources of gas supply, the analyst notes.

But even if Russia finances the construction, the most difficult thing will be to agree on the contract price, he continues. "When subsidizing the demand for gas that prevails in Iran, any gas import is obviously unprofitable. The Iranians are hardly ready to offer a price above $120-150 per 1,000 cubic meters, and Gazprom is hardly interested in a price below $200 per 1,000 cubic meters plus a tariff for transportation via a new gas pipeline in order to return investments," Belogoryev explains.