Iran, Turkey set to resolve gas dispute

Iran and Turkey are expected to settle their dispute over gas pricing within the next month, Managing Director for international affairs of the National Iranian Gas Company (NIGC) Mohsen Qamsari says. 

“Measures have been taken for the two sides to continue negotiations. Talks are currently underway and delegates from the two countries are trying to resolve their issues within the next month,” he said on Monday.

Qamsari also said Iran is ready to raise gas exports to Turkey which receives about 10 billion cubic meters of gas from the Islamic Republic a year under a 25-year deal signed in 1996.

Ankara has applied for an international court of arbitration on the pricing which it deems too expensive.

Turkey’s state-owned Petroleum Pipeline Corporation (BOTAS) took the case to the court of international arbitration in 2012. The case is still pending, with Ankara making a second effort for a ruling.

Iran is Turkey’s second supplier of gas after Russia, providing for one-fifth of the country’s consumption. Azerbaijan is another supplier.

Turkey says Iran’s price is too high, charging $490 for every 1,000 cubic meters versus $335 and $425 by Azerbaijan and Russia respectively.

During an April visit to Tehran by President Recep Tayyip Erdogan, Iran offered to double natural gas exports in return for a price cut which was turned down by Turkey.

In June, an energy official said Iran would win the arbitration case after Ankara’s first attempt was quashed by the International Chamber of Commerce in Switzerland in 2014.

“Given that the outcome of the first arbitration in the gas dispute was announced in Iran’s favor, the circumstances for the announcement of the second result will be also in Iran’s favor to a great extent,” head of the international liaison office at the National Iranian Gas Company Azizollah Ramezani said.