Turkey committed to gas deal with Iran: official

June 8, 2020 - 10:29

TEHRAN- An official with the National Iranian Gas Company (NIGC) says that Turkey has so far adhered to its gas deal with Iran.

In an interview conducted by Shana, Mehdi Jamshidi-Dana, the former dispatching director of NIGC who is now the managing director of Iranian Gas Transmission Company, said Turkey's gas imports from Iran were suspended on March 31 due to a pipeline explosion on Turkish soil. The incident took place on the Iran-Turkey Bazargan border and Turkey was responsible for repairing the pipeline.

But now, after about two months, Iran's gas exports to Turkey have remained stalled, spurring rumors regarding the incident.

Jamshidi-Dana further elaborated on the situation of Iran's gas exports to Turkey, the reasons for the delay in repairing the damaged pipeline and the future of the gas contract.

He said: "Turkey's plan is always to reduce its gas imports in the first half of the year, due to the onset of the hot season. This is what this country has been doing for years.”

He added: "However, Turkey has reduced its imports in such a manner that it does not incur fines for the country.”

Turkey's energy mix is diverse

Jamshidi-Dana further stated: “Turkey's energy mix is diverse. It receives natural gas from pipelines and liquefied natural gas (LNG) shipments, so it is natural for it to use different resources at any given time depending on its economic situation.”

The official said that the outbreak of the coronavirus and the fall in oil prices also exacerbated the situation. "On the other hand, the explosion of the Iranian gas export pipeline to Turkey on March 31 made things worse, so maybe Turkey is also interested in the quick repair of this pipeline.”

Jamshidi-Dana stressed: "This incident took place in Turkey, and the country also announced the conditions of force majeure in this regard, that is, it is in a situation that is beyond its control. But as soon as the country announced the status of force majeure, we corresponded several times with them and requested a visit, because we cannot accept that this is a force majeure situation.”

"However, due to the outbreak of the coronavirus, they said any representatives from Iran would need to stay in quarantine for two weeks, so we introduced a third-party inspector who also knew Turkish and stayed in Turkey to do the visit and sent us his report.”

Referring to the report on the visit to the damaged pipeline in Turkey, the official said: "According to the report, Iran has written to Turkey stating that it does not accept the conditions of force majeure and in several correspondences it was announced that Iran is ready to build this pipeline in eight days. However, Turkish side has not welcomed this offer that in our opinion this non-acceptance is natural, because the increase in temperature and the reduction of energy consumption do also play a part in here.”

No problem caused by sanctions in Iran’s gas exports to Turkey

"Another important point is that Iran has a contract with Turkey until 2025, and this country has worked according to all the provisions of the contract so far, and if it insists on the conditions of force majeure, Iran can follow up on this issue from the relevant authorities. Because we have documents and information that prove that the situation is not a matter of force majeure and it is very likely that the authorities will vote in our favor, and finally Turkey must pay for gas according to the take or pay law,” he added.

He said: "According to the follow-ups, our prediction is that the repairs of the Iranian gas export pipeline to Turkey will be completed in July and the gas flow will be resumed."

Referring to some concerns about the sanctions on Iran, the official said: "There is no need to worry about the suspension of gas supplies to Turkey due to the sanctions, because this country has so far been exempted from the ban on gas imports from Iran and so far there is a problem in this regard."  

On May 31, Managing Director of National Iranian Gas Company (NIGC) Hossein Montazer Torbati said that the conditions governing Iran’s long-term gas contracts probably undergo essential changes after the coronavirus pandemic.

The comments come after reports suggested that Turkey, a main customer of Iran’s natural gas, is unwilling to repair a pipeline damaged in an explosion in late March as it seeks lower prices in the light of a recent fall in international crude prices.

Gas export deals designate oil prices as a benchmark for determining gas prices although any price change would need at least six months to take effect.

Montazer told the semi-official ILNA news agency that Iran would introduce new pricing mechanisms in gas export deals in future, without elaborating on how they would work.

He said Iran would also start negotiating with Turkey about an extension to the current gas export deal beyond 2025.

The NIGC chief said Iran would always remain a reliable supplier of natural gas to Turkey despite changes that are taking place in the country’s energy market where the government is allowing more activity for the private-sector suppliers.

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