Iran to settle 30% of Turkmenistan gas dues in cash

Business Materials 26 July 2018 10:01 (UTC +04:00)

Tehran, Iran, July 26

By Kamyar Eghbalnejad, A. Shirazi - Trend:

The deputy head of Iran-Turkmenistan Chamber of Commerce said Tehran and Ashgabat finalized a goods-for-gas deal, which was preliminary agreed during a visit by the Iranian president to the neighboring country in 2016, noting that Iran will clear 30 percent of its dues to Turkmenistan in cash.

Iranian goods and services will be bartered for Turkmenistan’s natural gas and 30 percent of Iran’s gas fees will be paid in cash and for the rest Ashgabat will receive Iranian goods, Abdolhalim Maher told Trend on July 26.

In 2016, Iran and Turkmenistan envisioned a $30 billion barter deal in their economic exchange.

The deal will remain in place through 2026, according to Iranian officials. Turkmenistan will receive technical, manufacturing and engineering supplies from Iran in exchange for natural gas.

Iran buys almost a third of Turkmenistan's exported gas for heating in winter and other use in the country’s northern provinces which are far from southern hydrocarbon fields.

There is also a railway link between the two neighbors, stretching over 926 kilometers up to Kazakhstan. It is emerging as a vital route to link the Central Asia to the Persian Gulf and beyond.

“Iranian goods will make up for 70 percent of Tehran’s gas fees to Ashgabat,” he added.

Maher added that the two countries’ dues with respect to the rail link will be also settled through the barter deal.

Elsewhere in the interview, he pointed to the volume of trade turnover between the two neighboring nations and said, “Currently, issues like rising road tax for Iranian truck drivers are affecting ties between the two nations”.

He further expressed hope that the trade exchange between Tehran and Ashgabat would boom with the implementation of new measures worked out by the two sides.

Iran and Turkmenistan are members of Ashgabat Agreement—a multimodal transport agreement signed in 2011 which envisages facilitation of transit and transportation of goods between Central Asia and the Persian Gulf.