The Iranian government says the country has agreed on a contract to receive a large amount of natural gas from Russia.

Iran's state-run news agency says Iranian oil minister Javad Owji announced on Wednesday that the National Iranian Gas Company and Russian state-affiliated energy giant Gazprom have signed documents for the gas deal.

Russian gas supplies are expected to be consumed in Iran as well as exported to neighboring countries.

Iran has one of the world's largest natural gas reserves. But it lacks funds to maintain facilities and carry out new drilling due to economic sanctions by the US and other factors.

The Middle Eastern country experienced shortages of gas necessary for power generation during peak times in the summer and winter.

The amount of gas transported per year under the agreement is expected to be equivalent to a third of Iran's annual production, and worth up to 12 billion dollars.

European countries have significantly reduced their dependence on Russian gas in response to Moscow's invasion of Ukraine. The latest agreement could invite backlash from these countries.

Incoming Iranian President Masoud Pezeshkian, who is set to take office on July 28, has indicated he will seek to improve ties with Western nations while maintaining friendly relations with Russia.