Turkey must not depend on gas suppliers – BOTAS (exclusive)

Oil&Gas Materials 3 June 2015 18:14 (UTC +04:00)
Russia’s gas discount for Turkey, the supplies of Iraqi gas to the country and others are among the most pressing issues for the Turkish government today.
Turkey must not depend on gas suppliers – BOTAS (exclusive)

Baku, Azerbaijan, June 3

By Rufiz Hafizoglu - Trend:

Russia's gas discount for Turkey, the supplies of Iraqi gas to the country and others are among the most pressing issues for the Turkish government today. In an interview with Trend Agency, deputy general manager of the Turkish state-owned BOTAS Petroleum Pipeline Corporation, Nedim Ozyol spoke in details about the gas supplies to Turkey.

Russian gas discount

Russia's Gazprom and Turkey's BOTAS are in talks on the discount for the Russian gas supplied to Turkey, said Ozyol. He said that currently the parties have many unresolved technical issues, and without a mutual agreement it would be impossible to settle this issue, and both parties are working to resolve the technical and financial issues.

Ozyol said that once the parties agree on the details of the future discount for the Russian gas supplied to Turkey, BOTAS and Gazprom will ink an appropriate agreement on the matter.

"Russia and Turkey have no final agreement on the discount for the delivered Russian gas, and without the both parties' consent it is impossible to resolve this issue," he said.

Turkey's BOTAS Petroleum Pipeline Corporation expected that Russia will make a 15-percent discount acceptable for Ankara for the gas supplied to Turkey. However, Gazprom agreed to offer discount only for the private Turkish companies which account for over a third of Russian gas import.

Supply of Iraqi gas to Turkey

As is known, currently, the situation in Iraq is not quite stable, said Ozyol, adding that today many companies intend to invest in Iraq's economy. Moreover, some companies have already made investments there.

Ozyol believes that first of all, stability is necessary for serious and large-scale investments. He added that currently, Turkey is fully ready to receive Iraqi gas and the domestic pipelines were reconstructed for this purpose.

Thus, everything was done in order to ensure Turkey's readiness to import Iraqi gas if this country is ready to export it, said Ozyol. He said Turkey understands in which situation is Iraq today and the Iraqi side makes every effort to develop its energy sphere.

"It is not ruled out that Iraq will be unable to export its gas within the timeframe, but sooner or later the export of Iraqi gas to Turkey will be possible," Ozyol said, adding that it is not ruled out that the prices on Iraqi gas will be most acceptable for Ankara, he said.

Will Iraqi gas replace Russian one?

He said that there is one principle in the imports of gas for Turkey, namely, the country must not depend on any source of supply.

"Turkey takes this into account," he said. "The country has been recently working hard to import gas from various sources," Ozyol said. "One can say with confidence that Turkey will not change this principle in the future."

Thus, in case of gas import from Iraq, Ankara will simultaneously continue its import from Azerbaijan, Iran and Russia. Ankara and Erbil (capital of the Kurdish autonomy in Northern Iraq) have a contract for the gas supply.

In accordance with the agreement, it is expected that Iraq will begin exporting gas to Turkey in early 2016. Initial gas supply volumes will amount to 30 billion cubic meters a year.

Court of Arbitration between Ankara and Tehran

Ozyol said that at present, the Court of Arbitration is considering a lawsuit of Ankara to Tehran to grant discounts on the Iranian gas supplied to Turkey. Ankara is waiting for the decision of the Court of Arbitration, and it is too early to say which side the Court will support in this matter.

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

After that, Iran demanded that Turkey withdraw the lawsuit from the International Court of Arbitration. Gas prices are not officially disclosed, but, according to the Turkish media, Turkey buys Iranian gas at $490 per 1,000 cubic meters. The agreement on supply of Iranian gas to Turkey was signed in 1996. Turkey has contracts with Iran for the supply of 10 billion cubic meters of gas per year.


Follow the author on Twitter: @rhafizoglu