BAKU, Azerbaijan, Nov. 12 (UPI) -- Tehran and Baku signed a memorandum of understanding to supply 17.6 billion cubic feet of natural gas to Iran each year from 2010.
Both countries sit on vast natural gas reserves. Baku is eager to expand its client base while Iran struggles with refining capacity.
Rovnag Abdullayev, president of the State Oil Co. of Azerbaijan Republic, said original volumes slated for Iran are more than 17 billion cubic feet per year with gradual increases planned, the Azeri Press Agency reports.
"Work is under way now to repair an existing pipeline to Iran. The compressor station in the border area of Astara will be upgraded," he added.
The pricing mechanism, Abdullayev said, was "close" to market conditions for natural gas.
Officials said a final agreement on natural gas would be signed by both countries before the end of the year.
