“Take or pay” clause not omitted from Iran-Turkey gas deal

Business Materials 3 December 2014 12:12 (UTC +04:00)

"Take or pay" clause not omitted from Iran-Turkey gas deal

Baku, Azerbaijan, Dec.3

By Fatih Karimov - Trend:
The "take or pay" clause has not been removed from the gas contract between Iran and Turkey.

National Iranian Gas Company's Managing Director Hamid Reza Araqi said no changes have been made in the contract for exporting Iranian gas to Turkey, Iran 's Mehr news agency reported on Dec. 3.

A take-or-pay clause is essentially an agreement whereby the buyer agrees to either take,and pay the contract price for, a minimum contract quantity of commodity each year or pay the applicable contract price for such quantity if it is not taken during the applicable year.
Negotiations have been made with Turkey on increasing the volume of gas exports, but no new deal has been signed yet, Araqi said.

Turkish Minister of Energy and Natural Resources Taner Yildiz said in October that Turkey will abandon the "take or pay" principle in gas supplies from Iran in late 2014.

Turkey buys Iranian gas at $490 per 1,000 cubic meters. Turkey and Iran signed a contract for the annual supply of 10 billion cubic meters of gas on August 8, 1996. The contract duration is 25 years.