BAKU (Reuters)–Iran has proposed building a 190-mile pipeline costing $400 million to transport Caspian energy resources through its territory–an official in the Azeri government–who did not want to be identified–said on Thursday.
"Iran proposes to build a pipeline linking Baku with Tabriz in the north of Iran and then link it with the country’s pipeline system," he told Reuters.
The proposal was made during a visit to Azerbaijan this week by Iranian Foreign Minister Kamal Kharrazi. It was not clear who would finance the proposed pipeline.
"In case of implementing this project–we could transport Caspian oil to the Gulf or make oil swap deals with Iran," the official said.
Baku has not yet responded to the proposal. But–during a meeting with Kharrazi on Wednesday–Azeri President Haydar Aliyev said "the issue of Iranian participation in transportation of the Caspian energy resources from Azerbaijan is the prerogative of oil companies which work in Azerbaijan."
He also said Azerbaijan was ready to transport its oil in any direction if it was economically advantageous.
Iran is seen as one of the cheaper and more attractive options for transporting crude oil from the Caspian Sea but US sanctions have so far ruled it out.
US officials have been firm in their insistence that trade with Iran–and especially any attempts to build a pipeline there–would feel the full weight of US sanctions.