Iran to not decrease gas export to Turkey during winter
Baku, Azerbaijan, Nov. 16
By Umid Niayesh - Trend:
Iran will not decline gas export to Turkey during winter, Hamid Reza Araghi, managing director of National Iranian Gas Company said, the country's ISNA news agency reported Nov. 15.
Araghi made the remarks while responding a question about the Islamic Republic's projected measures to handle the possible gas shortage in winter.
He said that Iran will fulfill its commitments on the issue within the mutual contract.
Araghi added that if Turkey refuses to import gas from Iran, it will be fined according to the contract.
The Islamic Republic faced severe gas shortages last winter. In addition to cutting the gas supply to power plants, which led to burning $30 billion of liquid fuels, the Iranian government had to decrease gas delivery to petrochemical plants from 1,236 million to 530 million cubic feet which caused a drop in the petrochemical production by 7.5 million metric tons during the last fiscal year (ended on March 21).
On the other hand Turkey which is heavily dependent on foreign gas supplies, has faced shortage risks posed mainly by Iran's decision to cut the flow of natural gas to Turkey in previous years.
Turkey imports about 20 percent of its oil and gas needs from Iran. Ankara has previously requested for a discount on the price of gas it imports from Tehran.
It is while Iran has proposed to raise the volume of gas exports to Turkey up to 5 billion cubic meters per year in exchange for giving a discount.
Since the 1990s, take-or-pay deals have been a source of conflict with all gas suppliers to Turkey. Due to its budget deficit, in 2009 the Turkey's Energy Minister Taner Yildiz began a systematic negotiation with supplier countries to review take-or-pay conditions. The objective is either to end take-or-pay or reduce Turkey's commitment for gas-import volume.