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Iran’s new challenge, losing Turkmen gas

Iran Materials 15 November 2012 16:25 (UTC +04:00)
Among the silence of Turkmen official position, Iranian Petroleum Minister Rostam Qasemi announced that Turkmenistan has suspended supplying gas to Iran
Iran’s new challenge, losing Turkmen gas

Dalga Khatinoglu, Trend's Iran News Service Chief/

Among the silence of Turkmen officials' position, Iranian Petroleum Minister Rostam Qasemi announced that Turkmenistan has suspended supplying gas to Iran.

This is second time during past five years that Turkmenistan cuts gas supplies to Iran in a cold season, while this country reduced gas export to Iran last winter by 10 mcm per day.

The head of the Iranian National Gas Company Javad Owji said last month that Turkmenistan's gas exports to Iran has reduced by 52 per cent in the current year compared to last year, while now this country supplies only 4 to 5 mcm of gas per day to Iran. Turkmenistan is obligated to support Iran with 14 bcm of gas per year (nearly 40 mcm per day) through two pipelines: the Korpeje-Kordkuy route which was commissioned in 1996, and the Dauletabad-Sarakhs-Khangiran pipeline which came on stream in 2010. The total capacity of pipelines is about 20 bcm per year.

Turkmenistan has enough gas

Turkmenistan's natural gas production volume was 66.1 in 2008 before the pipeline explosion occurred in April 2009, which led to a halt its gas exports to Russia and a drop in its gas production level to 36.4 bcm in 2009. However, in 2010 Russia accepted the purchase of only one-third of the volumes it imported from Turkmenistan prior to the explosion.

The countries real gas production capacity is estimated at 75 bcm per year.

Turkmenistan's gas production, consumption and export volumes for 2011 were respectively 59.5 bcm, 25 bcm and 34.6 bcm, according to BP statistics. Ashgabat has about 15 bcm more gas production capacity. This country exported 10.2 bcm of gas to Iran, 10.1 bcm to Russia and 14.3 bcm to China during last year. Of course, Turkmenistan produced some 117.700 tons of liquefied natural gas In January-October 2012, this country has still the capacity of huge surplus gas production volume to export.

Second gas export disruption to Iran

Previously, at the beginning of 2008, Turkmenistan suspended gas export to Iran. However, the countries signed a new agreement in February 2009 and the sides agreed on a gas deal of 14 bcm per year.

Turkmenistan has other agreements with China, one of them signed in 2006 and the second one in 2010, in total, Turkmen gas export to China should rise to 65 bcm per year by 2020, but not now.

Turkmen gas export to China was expected to total 3-4 bcm in 2010, while the figure increased to 14.3 bcm in 2011.

"Since the commissioning of Turkmenistan-Uzbekistan-Kazakhstan-China gas pipeline in December 2009, it transported over 30 billion cubic meters of gas", China National Petroleum Corp said in a statement in June 2011. This means Turkmenistan has exported above 11 bcm of natural gas to China only in the first six months of 2012, indicating a significant increase. Regarding the fact Turkmenistan has decreased gas exports to Iran by 52 per cent during same period (15 to 18 mcm per day), then, this country has still a significant surplus gas output capacity to export.

The probable reasons

Iran's gas output during last year was 151.8 bcm, while its gas consumption was 153.3 bcm. This country has an obligation to supply 10 bcm of gas per year to Turkey, therefore cutting Turkmenistan's gas export to Iran would make serious problems for Tehran. Iran in turn, may have to accept paying a higher price for Ashgabat's gas to be resumed.

In this case if Turkmenistan has suspended its gas supply to Iran because of recent EU sanctions on Iran's gas export, or because of U.S. pressure, then both Iran and Turkmenistan would lose.

Turkmenistan has planned to diversify its gas export routes meaning it will lose one of its triple major gas customers. On the other hand, Iran pays USD for Turkmen gas, while China barters the country's gas with commodities and Russia is not a reliable gas customer for Turkmenistan as it resumed gas import from Turkmenistan with lower volume and price in 2010.

Turkmenistan has other potential gas export routes such as TAPI and Nabucco West as well.

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