Iran continues legal battle over Turkmen gas: Company

NIGC spokesman Mohammad Asgari said the case is still being examined at the tribunal and no ruling has been issued yet, the Ministry of Petroleum’s Shana news agency reported.  

His remarks came after a local news agency said Iran had won the first phase of litigation at the ICA over the quality and price of gas it received from Turkmenistan in 2007.

According to the court ruling, Turkmenistan must pay compensation to Iran for sudden cut in gas supplies during the winter, the agency quoted an “informed source” at the Iranian Ministry of Petroleum as saying.

“During the two years since Iran’s filing of a complaint against Turkmenistan for cutting gas supplies in the winter of 2007, Iran provided credible evidence that showed the country was not authorized to do so,” the source said. “Hence, Turkmenistan must pay compensation to Iran.”  

Turkmenistan stopped gas exports to Iran, demanding quick payment of what it views as arrears which are disputed by Tehran.

The row is related to Iran’s imports of gas for distribution in its northern provinces which are close to Turkmenistan, because Iranian natural gas fields are mostly located in the country’s south.

Turkmenistan claims that Iran owes it about $1.8 billion, but Minister of Petroleum Bijan Zangeneh has said the figure is not correct.

The halt happened at a time when Iranian regions that depended on Turkmen gas deliveries were experiencing some of the coldest weather in 30 years.

Turkmenistan pounced on the occasion to demand a nine-fold hike which pushed the price up to $360 from $40 for every 1,000 cubic meters of gas. It prompted one Iranian official at the time to describe Ashgabat’s behavior as attempted blackmail.

Tehran imported about 23 million cubic meters of gas per day from Turkmenistan before the outbreak of the dispute.

Later that year, Iran inaugurated a gas pipeline which officials said would dispense with supplies from Turkmenistan.

New pipeline cuts Iran’s reliance on Turkmen gasThe Damghan-Neka pipeline, the last segment of a trunkline which feeds gas from Iran’s giant South Pars field in the Persian Gulf to the Mazandaran province in the Caspian Sea, was inaugurated by Minister of Petroleum Bijan Zangeneh on Tuesday.

The Damghan-Neka pipeline, the last segment of a trunkline which feeds gas from Iran’s giant South Pars field in the Persian Gulf to the Mazandaran province in the Caspian Sea, was inaugurated by Zangeneh.

The 170 km pipeline has a capacity to transfer 40 million cubic meters of gas per day, media reports said at the time. 

“With the opening of the pipeline, Iran no longer needs to import gas from Turkmenistan,” the spokesman for parliament’s Energy Commission Asadollah Qareh-Khani said then.

For a land-locked country such as Turkmenistan, natural gas is the only viable export commodity that leads to revenue generation. The country has no access to open seas and its shipment of gas to international markets has to go through the neighbors, including Iran.

Traditionally, Turkmenistan exported its natural gas to Russia till 2016, but the energy trade came to a halt following a dispute over gas prices.

Losing Iran has left China as the only foreign country purchasing Turkmen gas through a pipeline which supplies between 30-40 billion cubic meters annually.

Turkmenistan has turned to energy-hungry India which envisages importing gas from Central Asia at some point of time in the future.