Baku, Azerbaijan, Aug. 21
By Rufiz Hafizoglu – Trend:
Increasing gas and electricity supply from Iran to Turkey will be one of the topics during the upcoming visit of Turkey’s Minister of Energy and Natural Resources Berat Albayrak to Tehran, the Turkish Energy and Natural Resources Ministry told Trend.
The date of the Turkish minister’s visit is being specified, said the ministry.
Earlier, during the meeting with his Turkish counterpart Aug. 12, Iran’s Foreign Minister Mohammad Javad Zarif spoke about Iran’s interest in increasing supplies of natural gas and electricity to Turkey.
Iran and Turkey signed a gas contract in 1996 and under the contract Iran must supply 10 billion cubic meters of natural gas to Turkey per year or about 27 million cubic meters per day.
Following the negotiations with his Iranian counterpart, Turkey’s Foreign Minister Mevlut Cavusoglu said Turkey intends to import more gas from Iran, but price issues need to be addressed for this.
Turkey says Iranian gas is too expensive compared to other suppliers, such as Russia, Azerbaijan, and successfully defends its opinion in a court.
In 2012, Turkey sued Iran in the International Court of Arbitration for overpricing on gas purchases during the four-year period between 2011 and 2015. The court decided in favor of Turkey in February 2016 and ordered that both parties agree on a reduction between the rates of 10 to 15 percent in the price of Iranian gas exports to Turkey. The exact discount rate is expected to be announced in September 2016.
However, apart from price disagreements, there are some problems with the stability of supply. Iran periodically cuts gas supply to Turkey due to growth in domestic consumption.
Iranian gas is supplied to Turkey via the Tabriz-Ankara pipeline, which has a capacity of 14 billion cubic meters per year.
In 2015, Iran reduced gas supply to Turkey by 12.3 percent to 7.83 billion cubic meters.
In January-May 2016, Iran exported 3.35 billion cubic meters of gas to Turkey, that is, 7 percent more than in the same period of 2015, according to Turkey’s Energy Market Regulatory Authority (EPDK).
Iran’s share of Turkey’s total gas import was 16.79 percent in January-May 2016.
The growth in exports was possible due to the increased natural gas production at the South Pars field.
Iran is able to export up to 2,000 megawatts of electricity to neighboring countries and it can connect its energy network with Europe’s energy network through Turkey. Iran exports 350 megawatt hours of electricity to Turkey per year.
Trade turnover between Turkey and Iran amounted to $2.9 billion in Q2 2016. The two countries’ trade turnover was $9.76 billion in 2015.
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