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News // Incidental

Turkmenistan to take $1.8 billion gas dispute with Iran to international arbitration

06 December 2017 , 16:10Neftegaz,.RU236

Turkmenistan plans to take to international arbitration a dispute with Iran over $1.8 billion, Ashgabat claims Tehran owes for Turkmen natural gas deliveries, Turkmen media reported on December 5, 2017.

 

Turkmenistan stopped the gas flow to Iran in January 2017, demanding that the Islamic Republic settle a debt which allegedly remained outstanding from previous supplies.

Ashgabat claims Iran owes it $1.8 billion from sales between 2007 and 2008 when freezing winters led to severe shortages across 20 Iranian provinces, forcing the country to raise gas imports from its northeastern neighbor.

 

At the time, Turkmenistan demanded a 9-fold hike which raised the price of gas up to $360 from $40 for every 1,000 cubic meters.

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

 

According to Turkmen officials, the balance has built up to a debt of $1.8 billion which Iran is rejecting and has threatened to take the case to international arbitration.

In January, the National Iranian Gas Company (NIGC) said a plan was on agenda to file a lawsuit against Turkmenistan over stopping gas exports to Iran.

 

Myrat Archayev, the head of Turkmenistan's state-controlled Turkmengas company, now says that negotiations with Iran over the dispute have been unsuccessful, and the Iranian side had proposed taking the matter to arbitration, RFE/RL's Turkmen Service reported.

 

Turkmen President Gurbanguly Berdimukhamedov instructed Archayev to accept the offer to seek mediation in an international arbitration court, according to the Turkmen state news agency.

 

In 2016, Russia stopped buying gas from Turkmenistan. With the cutoff of supplies to Iran, Ashgabat is now left with China as its sole buyer of natural gas.

 

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