Iran Rejects Turkey's Complaint about Gas Supply Prices as "Baseless"
Mon Aug 18, 2014 1:46


TEHRAN (FNA)- Managing Director of the National Iranian Gas Company (NIGC) Hamid Reza Araqi rejected that Iran is selling its gas to Turkey at higher than international market prices as groundless.

Araqi's remarks came in reaction to a complaint by Turkey's state-owned Petroleum Pipeline Corporation (BOTAS) filed at an international court of arbitration applying for a ruling on Iran's gas pricing. Turkey deems Iranian gas too expensive compared with other suppliers like Russia and Azerbaijan, an assertion rejected by Tehran.

Speaking to FNA, Araqi rejected the complaints by Turkey against Iran, and said, "Turkey has filed two complaints against Iran.

He noted that in the first complaint the court of arbitration has ruled that issues related to price reduction did not fall within its jurisdiction while Ankara has filed its second complaint on the same basis.

"Turkey has filed two complaints on the basis of price reduction and price revision which account for a 60 percent reduction in the price of Iran's gas supplies," Araqi added.

He noted that the reason for Turkey's BOTAS company to ask for a price reduction has been a contract between Iran and a Persian Gulf littoral state that did not take effect.

In 2012, Turkey's BOTAS applied to an international court of arbitration for a ruling on Iran's gas pricing. The case is still pending.

Last month, Iranian Deputy Oil Minister Ali Majedi underlined that Ankara is currently holding talks with Tehran to increase the volume of its gas imports irrespective of the two countries' row over the volume of earlier supplies.

"The result of the arbitration might be announced in a six-month time, but the two countries' negotiations over increasing Iran's gas supplies to Turkey might end in result prior to that date, meaning that Iran might increase its gas exports to Turkey before the court ruling is issued, which shows that the current negotiations are not related to the two countries' row," Majedi told FNA.

On January 30, 2014, Turkish Energy Minister Taner Yildiz said that his country could double the amount of natural gas it imports from Iran if the two countries can agree on a price.

However, Araqi said that Iran will not decrease the price of the natural gas it exports to Turkey under the current agreement.

"We can increase the amount of Iran's gas exports to Turkey under a new agreement," Araqi said.

Under a contract signed in 1996, Turkey imports 10 billion cubic meters per year of gas from Iran. The contract became active in 2001. Turkey depends on imports for almost all of its natural gas needs, estimated to hit 52 billion cubic meters this year.

Turkey is keen to increase oil and gas imports from Tehran in anticipation of sanctions against Iran's huge energy sector being dismantled in the wake of an interim nuclear deal last year between Tehran and six big powers.