Turkey, Iran set for gas price arbitration case

KUWAIT - Hürriyet Daily News

Turkey’s Energy Minister Taner Yıldız (L) sits across from Rostam Qasemi, Iran’s Minister of Petroleum on the sidelines of the 13th International Energy Forum in Kuwait. AA Photo

Turkey will not wait to open an arbitration case against Iran over a natural gas price dispute following an end to negotiations, Turkey’s energy minister has said.

Yıldız and his Iranian counterpart, Petroleum Minister Rostam Qasemi, held a final bilateral discussion about the price dispute on the sidelines of the 13th International Energy Forum in Kuwait yesterday, according to Anatolia news agency. Noting that this was the last discussion before Turkey could open a case tomorrow, Yıldız said Iranian officials had not been receptive to negotiations.

The government will soon open the case it has been preparing as there is nothing further to negotiate about between the parties, said Yıldız.

“They said there were legal justifications rather than discussing whether the price was reasonable. Iran is Turkey’s second largest natural gas supplier and there is a price difference [between Russian and Iranian gas],” he said.

‘Friendship is one thing’

The arbitration process will not have an adverse effect on the relations between the two countries, Yıldız said. “Friendship is one thing, business is another. We are trying to solve a trade problem without affecting the trade itself.”

He said there was a “serious” difference between the price of Iranian gas and the market price. “I cannot say the Iranians are ill-intentioned, that is why our relations are not badly affected. ... The Iranians also believe that we are well-intentioned,” he said, citing a previous natural gas price dispute between Turkey and Azerbaijan that had resulted in Turkey paying the price difference.

Iranian natural gas has been overpriced since the end of 2010 due to an agreed formulation to calculate the gas price.

Iranian oil exports fall

Meanwhile, Qasemi slammed the use of the vital commodity as a political tool by “big countries” against producers yesterday, warning that sanctions would jeopardize supplies, according to Agence France-Presse.

“Unfortunately, some big countries who are among the major energy consumers view oil as one of the basic constituents in their military, security and political strategies and use it as a political tool against oil-producing countries,” he said.

Sanction-hit Iran’s oil exports are forecast to fall by 800,000 barrels per day (bpd) after the middle of the year, the International Energy Agency said yesterday in its monthly oil report. The IEA said Iranian oil exports would decline to around 1 million bdp as global demand for oil grows by 800,000 bpd to 89.9 million bpd.