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Turkey to abandon "take or pay" principle in gas supplies from Azerbaijan and Iran

Oil&Gas Materials 21 October 2014 14:05 (UTC +04:00)
Turkey will abandon the "take or pay" principle in the process of gas supplies from Azerbaijan and Iran, İHA agency reported Oct. 21 with reference to Turkish Minister of Energy and Natural Resources Taner Yildiz’s statement.
Turkey to abandon "take or pay" principle in gas supplies from Azerbaijan and Iran

Baku, Azerbaijan, Oct. 21

By Rufiz Hafizoglu - Trend:

Turkey will abandon the "take or pay" principle in the process of gas supplies from Azerbaijan and Iran, İHA agency reported Oct. 21 with reference to Turkish Minister of Energy and Natural Resources Taner Yildiz's statement.

Yildiz said that Turkey will abandon the "take or pay" principle in gas supplies from Iran in late 2014. He also said that Turkey completely abandoned this principle in gas supplies from Russia in 2013.

"Turkey will abandon the "take or pay" principle in gas supplies from Azerbaijan in 2015," Yildiz said.

There are no negotiations regarding the refusal from the "take or pay" principle used for payments for gas supplied from Azerbaijan to Turkey, SOCAR said earlier.

Turkey buys Iranian gas at $490 per 1,000 cubic meters. Turkey pays $335 for 1,000 cubic meters of Azerbaijani gas that is supplied via the South Caucasus Pipeline (Baku-Tbilisi-Erzurum pipeline). The country pays $425 for 1,000 cubic meters of Russian gas.

A contract for the supply of Azerbaijani gas as part of the first stage of developing the Shah Deniz gas condensate field was signed on May 12, 2001 for 15 years, according to a statement posted on the website of the Turkish state pipeline company Botas.

The contract envisages the annual supply of 6.6 billion cubic meters of gas. Azerbaijan and Turkey also have the second contract, which envisages the supply of gas as part of the second phase of developing the "Shah Deniz" field. It envisages supplying six billion cubic meters of gas annually. The contract was signed on October 25, 2011 for 33 years. It is expected to begin supplying in 2017-2018.

Turkey and Iran signed a contract for the annual supply of 10 billion cubic meters of gas on August 8, 1996. The contract duration is 25 years.

Turkey also has an agreement with Algeria and Nigeria for the supply of 4.4 billion and 1.2 billion cubic meters of liquefied natural gas respectively per year.

Ankara appealed to the International Court of Arbitration regarding the price on Iranian gas in March 2012.

Earlier Yildiz stressed that Turkey's suit towards Iran concerning the prices on supplied gas will be considered at the International Court of Arbitration until the end of 2014.

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