Turkey wins gas price row against Iran in court

ANKARA/TEHRAN

The International Court of Arbitration has ruled against Iran in its gas dispute with Turkey, Shana news agency quoted the managing director of the National Iranian Gas Company, Hamid-Reza Araqi, as saying Feb. 2.

“The International Court of Arbitration has ruled [for] a 10-15 percent of discount for the gas supplied to Turkey during 2011-2015,” he said, as quoted by Reuters on Feb. 2. 

Turkish Energy Minister Berat Albayrak confirmed that the court has ruled in the favor of Turkey, which is expected to take between 13.3-15.8 percent of discount. 

“The International Arbitration Court has recently made a decision in the favor of Turkey. We’ll most probably receive a discount this year, which is very good for us. We plan to make a discount in gas prices this year,” Albayrak told journalists in Chile on Feb. 2. 

However, the National Iranian Gas Company (NIGC) has announced that the claim for price revision with Turkey’s gas grid, BOTAŞ, is still already under investigation by Arbitral Tribunal, which has not yet made a final decision for the case. 

“The news which has been published recently by some news agencies in Iran does not reflect the final decision of Arbitral Tribunal and the NIGC is still waiting for final decision of the tribunal. The final decision will be announced by the NIGC in due course. The NIGC still remains firm on the current gas price and believes that the gas export price is reasonable,” it said in a press announcement on Feb. 2. 

Turkey, which buys around 10 billion cubic meters (bcm) of gas from Iran, opened two separate cases against Iran in 2012. One of the files was over higher gas prices and another was over deficiencies in gas distribution. In the second case, the court sided with Iran. 

Iran proposed to double exports of its natural gas for a discount last year, but Ankara rejected the offer.

Sources from the Turkish Energy Ministry stated in 2015 that Iran declined to make any cuts in the price of gas exports, but offered to open a new gas line to supply around 10 bcm at a cheaper price, which Ankara deemed “unacceptable.”

In a separate court case against Iran in 2004, Turkey’s gas grid was awarded a discount of 16.5 percent.