Iran will not lower gas prices for Turkey

A view of Iran’s South Pars Gas and Oil Field

Turkey will not receive discounts on Iranian gas despite complaints over lack of energy security, Iran’s national gas company chairman says.

Turkey’s appeal for a discount on gas prices is “unacceptable,” said Reza Araqi, Iran’s national gas company chairman, underlining that ”future gas prices depend on the negotiations.”

Turkey claimed that Iran has a lack of energy supply security to the International Chamber of Commerce (ICC), a mediator in disputes over interruptions in gas supplies.

In response to Turkey’s claim and request for lowering gas prices, Araqi told Anadolu Agency (AA) that Iran would continue to defend its position in court. He said Iran did not accept Turkey’s claims about lack of energy supply security.

“Thanks to our strong infrastructure, we did not have any problem in supplying gas, even at times we had electricity and water shortage this year,” Araqi said. “We see these as allegations aimed at decreasing the price.”

The arbitration process over high gas prices began in February 17 following a visit by Turkey’s Energy Minister Taner Yildiz to Iran last month.

As of 2013, Turkey pays more for the gas it receives from Iran with US$507 per cubic meter. Turkey imports 10 billion cubic meters of Iranian gas per year, making Iran its largest supplier of gas. Russia is the second largest supplier of gas to Turkey, charging US$429 for the same amount.

In 2004, Turkey’s Petroleum Pipeline Corp. requested a price revision from Iran on imported natural gas, claiming Iran failed to fulfill its obligations on quantity and quality during the winter season. The negotiations on a reduction were conducted by Yildiz to decrease the level of “take or pay” gas purchases, which penalizes Turkey if it does not purchase a certain amount over a period of time.

Iran refused the requests and took Turkey to court in 2005.

By World Bulletin



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