Iran Ready for Talks on New Gas Deal with Turkmenistan

A top Iranian energy official said the country is ready to stop taking its case against Turkmenistan to the international arbitration court and resume talks on a new gas deal, provided that Ashgabat compensate Tehran for reneging on a previous agreement by cutting supplies.

In an interview with Tasnim, Managing Director of the National Iranian Gas Company (NIGC) Hamid Reza Araqi voiced Iran’s readiness to resume negotiations with Turkmenistan on a new gas deal, stressing that Tehran considers the previous agreement as null and void because Turkmens breached it by cutting gas supplies to Iran this month.

Iran is ready to hold off on taking a case against Turkmenistan to the international arbitration and start a new round of talks provided that Turkmenistan agrees to compensate Iran and the amount of debts and payments is exactly specified so that a possible new deal would outline the future of bilateral gas trade, he said.

Araqi also noted that Iran has remained committed to its contracts in gas trade with Turkmenistan and did not pause to export gas to Azerbaijan under a swap deal with Turkmenistan despite Ashgabat’s lack of commitment.

Turkmenistan cut off gas supplies to Iran on January 1, saying Iran should clear its outstanding debts.

Turkmenistan’s Foreign Ministry said in a statement on Thursday that the Central Asian country is ready to continue gas talks with Iran, but also has the right to take the dispute to arbitration.

The statement also claimed that Iran’s debt stemmed from the National Iranian Gas Company’s failure to abide by the “take or pay” provision of the gas supply contract.

Iran has imported natural gas from Turkmenistan since 1997 for distribution in the north of the country, furthest from the gas resources in the south.

Turkmens occasionally raise their prices in the wintertime. In 2006, during days of freezing temperatures and blizzard in Iran, Turkmenistan cut off gas shipments and demanded a nine-fold price increase.

(Source: Tasnim, under Creative Commons licence)

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