Baku, Azerbaijan, June 24
By Dalga Khatinoglu
Iran's ambassador to Turkey announced that the two countries reached an agreement to increase Iranian gas export to Turkey.
The idea of increasing Iranian gas export volume to Turkey has existed for several years, but lack of infrastructure, dispute over price, lack of surplus gas in Iran, as well as imposed sanctions on this country prolonged the negotiations.
Iran's Ambassador to Ankara Ali-Reza Bigdeli told reporters on June 23 "Iran and Turkey have reached agreement in principle on increase in the amount of gas flow from Iran to Turkey as well as relative discount Iran gives to the country".
His statement came after Turkey rejected Iran's proposal in April to give Turkey a discount if the volume on gas export doubles.
Last year, Iran exported 9.76 billion cubic meters (bcm) of gas to Turkey, based on an agreement signed in 1996.
Turkey has filed two complaints with the International Court of Arbitration accusing Iran of overcharging as well as citing the low quantity of delivered gas.
Despite Iran's obligation to deliver 10 bcm/a of gas, the country has delivered less than 9 bcm/a to Turkey during last decade.
The International Court of Arbitration has rejected Turkey's claim on "the low quantity of delivered gas by Iran", but the dispute over price continues.
How much can Iran boost gas export to Turkey
Before 2014, Iran has had a serious problem in developing upstream gas projects, especially since 2009. Iran was only able to add gas to its production level since early 2014.
During this year, Iran's gas production increased by about 51 million cubic meters per day (mcm/d) and its gas production capacity increased by 100 mcm/d. For the current year, the same growth rate in gas production capacity is planned. Therefore, Iran can boost gas export to Turkey. However, the main problem is lack of infrastructure.
The Managing-Director of National Iranian Gas Exports Company said in early June that the current infrastructure has a capacity to deliver more 1.2 bcm/a of gas to Turkey, but if Turkey installs compressors on their own soil, Iran can deliver more 2 bcm/a of gas to Turkey.
He said that Iran has offered building thermal power plants in Turkey and feed them with Iranian gas.
If Iran wants to boost gas export to Turkey significantly, it should construct the 1850-km 9th cross-country pipeline, which would run from the South Pars gas field to the Turkish border and cost $6 billion.
Iran has also announced that it is keen to deliver gas to Europe through Turkey by joining to the Turkish Stream gas pipeline project, aimed to deliver 63 bcm/a of Russian gas to Turkey and EU.
It's not clear how Iran can join the Turkish Stream when there is need to construct 1,850 km in Iran and about 1,000 km of a new pipeline in Turkey to deliver the produced gas from South Pars field to the Turkish Stream pipeline.
Edited by CN
Dalga Khatinoglu is an expert on Iran's energy sector, head of Trend Agency's Iran news service
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