it is now threatening to stop buying any natural gas from the Islamic Republic, accusing Iran of charging too much.
Turkey is the only country to which Iran exports any sizable volume of natural gas. If Turkey stops buying, Iran will, for all practical purposes, be back where it was more than a third of a century ago when it first tried to become a factor in the natural gas realm.
Turkey has long objected to the price formula included in the contract the two countries signed in 1996. But the Turkish complaints have gotten it nowhere.
Murat Mercan, Turkey’s energy minister, said Turkey is losing patience. In an interview with the Trend News Agency of Baku last week, Mercan said, “The arbitration process between Turkey and Iran is still underway. If the parties fail to agree on the price, Turkey may abandon Iranian gas. Then Turkey will seek alternatives, including Azer-baijani gas.”
He said Turkey has an interest in diversifying its gas suppliers and that negotiations are underway now with Qatar for Turkey to get liquefied natural gas (LNG) from there.
Some thought Mercan’s comments on Iran were mainly meant to spur Iran into making a price concession. But the once warm relations between Iran and the religious government of Turkey have soured over the past year as a result of a number of frictions, such as the new US missile radar that Turkey has allowed to be deployed on its territory and the totally diametrical positions the two countries have on Syria.
In 1996, Iran and Turkey signed an agreement for Iran to supply Turkey with 30 million cubic meters of gas a day. That pipeline finally opened in 2001.
Iran first began exporting natural gas in the 1970s to the Soviet Union after building a pipeline from the south to the Soviet border. Immediately after the revolution, the new revolutionary regime raised the price unilaterally. The Soviets stopped buying and have never resumed any gas purchases from Iran.
Beyond Turkey, Iran sells small volumes of gas to Armenia and has an exchange agreement with Azerbaijan under which Iran supplies the isolated Azerbaijani enclave of Nakhich-evan with gas in exchange for an equal amount that Azerbaijan pumps across the border to Iran.
Iran had big plans for exports of piped gas to Pakistan and India and of LNG all around the world. But the pipe plans are still stalled. And Western sanctions have cut Iran off from the technology needed to liquefy gas for LNG exports by tanker.
