Iran, Turkmenistan start new round of gas talks

Iran Materials 20 June 2009 11:58 (UTC +04:00)

TEHRAN (MEHR - Trend )

Iran and Turkmenistan started a new round of gas talks in Ashgabat on Friday, the National Iranian Gas Export Company's managing director said.

The Mehr News Agency quoted Seyyed Reza Kasaiizadeh as saying that, "the two sides will discuss the contract period extension in the two-day meeting."

"The price of natural gas has fallen in the global markets due to the crude oil price fall. So we plan to negotiate with the Turkmen officials to reduce the gas export price," he added.

"We aim to extend the contract period for another 3 years," the official said while noting that Iran has also requested a rise in the volume of exported gas.

Turkmenistan has been supplying gas to Iran since 1997, but exports have never hit the Korpeje-Kurt Kui pipeline's full capacity of 8 billion cubic meters (bcm) per year, a report from the Russian newspaper Vremya said, adding that exports have not exceeded 6.5 bcm. 

Turkmenistan has a contract to send an additional 10 bcm to Iran in 2009.

In mid-March, Iran and Russia signed a gas swap deal that would see Gazprom assume responsibility for the delivery of Turkmen gas to Iran. Ashgabat would benefit from this arrangement since Russia would purchase Turkmen gas at a premium price. 

Iran currently pays $140 per thousand cubic meters (tcm); Gazprom is willing to buy the same gas for re-export from Ashgabat for $240/tcm. Russia is more willing to access to natural gas supplies in Iran's South Pars field, which holds an estimated 8 percent of the world's natural gas reserves. 

Ties between the two energy powers were strained in winter 2008 after Turkmenistan halted gas sales to Iran, but during an official visit by Turkmen leader Kurbanguly Berdymukhamedov to Tehran in February 2009, the two sides inked an agreement which would allow Iran to develop the Yolatan gas field in Turkmenistan and import 350 billion cubic feet of the extracted gas annually.

The feasibility studies for the Yotalan gas field has been finished and Petropars has proposed its finalized plan for the development of the field to the Turkmen officials.

Iran sits atop the world's second-largest natural gas reserves after Russia, and has long sought to promote itself as a transit route for oil and gas from central Asian states.

Turkmenistan, Central Asia's biggest gas producer, is seen as one of the key suppliers for the planned Nabucco pipeline from Turkey to Austria, designed to ease Europe's dependence on Russia for gas supplies.