Iran continue to talk with Turkmenistan over gas dispute

Business Materials 5 November 2017 13:23 (UTC +04:00)

‎Baku, Azerbaijan, Nov. 5

By Fatih Karimov– Trend:

Iran has spent almost one year without Turkmen gas, and despite the preliminary threats on suing Turkmenistan, the Islamic Republic still prefers to settle the disputes via talks.

Turkmenistan halted supplying gas to Iran on January 1 due to long-delayed claimed $2 billion debt.

Turkmenistan has been exporting gas to Iran under a 1997 agreement. During 2015, Turkmenistan doubled gas export to Iran to 9 billion cubic meters, but it again halved that in 2016 and stopped gas delivery on January 1, 2017.

At that time, Iranian officials said that Tehran is preparing to file a complaint against Turkmenistan in the International Court of Arbitration over the gas dispute.

Hamidreza Araghi, Oil Minister and Managing Director of the National Iranian Gas Company (NIGC), said earlier in May that the Islamic Republic has prepared documents to sue Turkmenistan for cutting gas export to Iran, and Ashgabat has already been informed about the issue.

According to him, Iran would sue Turkmenistan for three disputes: gas price, damage from sudden gas export cut to Iran, as well as the quality of gas.

However, Tehran did not close the doors for negotiation and preferred not to pursue the legal case so far.

On the other hand, Tehran accelerated steps to complete a pipeline to north-eastern region, increasing underground gas storage facilities capacity, as well as developing new fields in area, preparing for the second winter after Turkmenistan cut the gas supply to the Islamic Republic.

On August 1, Iran inaugurated a 170-km Damghan-Sari pipeline with 40 mcm/d of carrying capacity, a source in Iran’s Oil Ministry told Trend. The project is worth about $250 million. The pipeline will enable to transport gas to six north-eastern regions: Semnan, Golestan, Mazandaran, North Khorasan, Khorasan Razavi, and South Khorasan. Iran’s gas production capacity in northeast regions stands at about 14 bcm/y, about 12 bcm/y less than the demand.

Araqi said Nov. 5 that talks are underway between Iran and Turkmenistan over gas disputes and Iran “still has time to sue Turkmenistan.”

In an interview with ISNA news agency he expressed hope that the disputes would be settled via negotiations.

After all the South Pars gas field phases are put into operation, Iran will have volumes sufficient for feeding north-eastern provinces, as well as for exporting its own gas to Pakistan and/or Europe in case of need.

However, for now Tehran’s reliance on Turkmen gas import continues. Araqi’s recent comment actually is the issue’s confirmation.