Turkmenistan halts gas exports to Iran over payment row, Tehran says

January 2, 2017 11:58 am


* “Output increases…and cutting consumption can compensate for imports”: NIGC

* In Dec., Turkmenistan had threatened to stop gas exports because of arrears of roughly $1.8bn

* Iran has imported gas from Turkmenistan since 1997 for distribution in northern provinces

Turkmenistan stopped gas exports to Iran on Sunday in a long-running dispute over arrears, Iran’s state gas company said, days after Tehran said the issue had been temporarily resolved.

“Türkmengaz suddenly and…in an illogical manner, contradictory to the agreement, halted gas deliveries to Iran this morning, demanding quick payment of the disputed amount,” the National Iranian Gas Company (NIGC) said in a statement carried by the oil ministry news website SHANA.

Türkmengaz had no immediate comment.

Cut gas usage

NIGC called on consumers to cut gas usage, but said production increases and limiting industrial use could help avoid shortages during the cold winter months.

“Output increases…and cutting consumption in power plants, industry and homes in the winter can compensate for the imports,” the NIGC statement said.

Tehran said in December that Turkmenistan had threatened to stop gas exports because of arrears, which amounted to about $1.8 billion and dated back more than a decade. Iran wanted to refer the issue to arbitration.

But on Friday, Iranian oil minister Bijan Namdar Zanganeh was quoted by Mehr news agency as saying that Turkmenistan had reached a temporary agreement with Tehran to continue gas exports.

Iran has major natural gas fields in the south but has imported gas from Turkmenistan since 1997 for distribution in its northern provinces, especially during the winter.

Total deal

In November, France’s Total said it had signed a deal with Iran to further develop its part of the world’s largest gas field, becoming the first western energy company to sign a major deal with Tehran since the lifting of international sanctions imposed over Iran’s nuclear programme.

 

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