Turkey's economy not to suffer if country refuses to import Iranian gas

Oil&Gas Materials 18 January 2012 18:27 (UTC +04:00)

Azerbaijan, Baku, Jan.18 / Trend, A. Taghiyeva, T. Jafarov /

Turkey's possible refusal of Iranian gas will not affect its economy, as Ankara has ensured the country's energy security increasing gas supply from other sources, Turkish International Research Center's (USAK) analyst Hasan Selim Ozertem believes.

"Gas consumption in Turkey in 2011 amounted to approximately 40 billion cubic meters. Iran is an important exporter of gas to Turkey. However, it does not make Turkey dependent on Iranian gas," Ozertem told Trend on Wednesday.

Turkey will sue Iran at the International Court of Arbitration to dispute price of gas imported from the country, Turkish Energy and Natural Resources Minister Taner Yildiz said recently.
Iran has not agreed to Turkey's demand to reduce the price for gas supplied to this country, Yildiz said earlier.

According to Ozertem, Iran previously showed itself as an unreliable partner in the gas sector of Turkey. Thus, Iran cut off gas supplies to the country several times in 2007 and 2008, thereby causing damage to Turkish economy.

Ozertem also stressed that Turkey's appeal to the International Court of Arbitration does not mean a cancellation of the agreement with Iran.

"Appealing to the Court of Arbitration, Turkey is trying to change the terms of the agreement with Iran. This practice is frequently observed in the West in recent times. For example, Italy filed a lawsuit against the Russian Gazprom and won the case," he said.

Ozertem said if the Court of Arbitration decides in favor of Turkey, Iran will be obliged to obey a court order. However, it is not a fact that Iran will comply with international legal norms, he said.

According to the chairman of the Iranian Research Center Eurosevik Pirouz Mujtahidzade, if Iran and Turkey will fail to agree on gas prices and after appealing the Court of Arbitration, Ankara will not stop gas imports from Iran.

"Stopping gas import from Iran will only be possible if Turkey in this case will have some political purpose," Mujtahidzade, who is also professor at the International Relations Department at Tehran University, told Trend on Wednesday.

He also believes that the demand to unilaterally change the terms of the contract signed in 1996, is wrong.

"The agreement signed by both parties envisages steps to be taken in case of changes in hydrocarbon prices. Iran and Turkey will address the issue based on this mechanism," Mujtahidzade said.

He said it is surprising that Turkey appealed the International Court of Arbitration, as Ankara has always been a mediator in resolving the crisis between Tehran and the West. Relations between Turkey and Iran have not reached the stage when the West can offer solution, he believes.

"Turkey's this step shows how much gas price regulation mechanism provided by the agreement is unprofitable for Turkey," the expert said.

In 1996, Iran and Turkey signed an agreement to supply 10 billion cubic meters of gas to Turkey annually (30 million cubic meters per day). In 2011, export of Iranian gas to Turkey increased by 12 percent compared to 2010. The figure hit 24 million cubic meters of gas per day.

According to the statistic data of the Turkish State Pipeline Company Botas, Turkey imported 39.7 billion cubic meters of gas from Iran in 2011. Russia ranks first, followed by Iran and Azerbaijan among exporters of gas to Turkey.