Iran, Turkey to agree on gas price by year-end

Iran, Turkey to agree on gas price by year-end

Fri Sep 12, 2014 1:57PM GMT

Tehran and Ankara will conclude an agreement on the price of natural gas exported from the Islamic Republic to Turkey by the end of the current year.

“The parties have not come to a consensus about the gas prices up until now,” Turkish Minister of Energy and Natural Resources Taner Yildiz said on Thursday, adding that Iran has tabled new proposals for reduction in gas prices.

“According to these conditions, the gas prices can be reduced,” Yildiz was quoted by Trend news agency as saying.

Iran reportedly charges Turkey $490 for every 1,000 cubic meters of natural gas it exports to its neighbor. Turkey claims that the Republic of Azerbaijan and Russia supply gas to Turkey at $335 and $425 per 1,000 cubic meters, respectively.

Iran owns the world’s largest natural gas reserves after Russia, and is also Turkey’s second biggest gas supplier after Russia.

The country’s natural gas is of crucial importance to Turkey as the energy-hungry country uses a significant portion of imported Iranian gas to generate electricity.

On August 18, managing director of the National Iranian Gas Company (NIGC), Hamid Reza Araqi, said Iran can nearly double its gas shipment to Turkey from the current 36 million cubic meters per day with the start-up of new facilities.

Araqi, however, said Iran and Turkey would be required to sign a new contract for any increase in the volume of gas delivery.

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