Iran, Turkey Agree to Boost Gas Export with Discount

Iran says it has reached an agreement with Turkey on increase gas export at a relatively modified price.

Iran’s statement following Ankara rejection of Tehran’s proposal two months ago to double gas intake from Iran. According to Turkish media outlets, Iran sells a 1000 cubic meters of gas to Turkey at $480, while Russia and Azerbaijan sell $420 and $340 respectively.

Iran's Ambassador to Ankara Ali-Reza Bigdeli told reporters on June 23th that “Iran and Turkey have reached agreement in principle on increase in the amount of gas flow from Iran to Turkey as well as relative discount Iran gives to the country”.

Under a contract signed in 1996, Iran should export 10 billion cubic meters per year (bcm/a) of gas to Turkey. Iran delivered 9.7 bcm of gas to Turkey last year. However, Ali-Reza Kameli, Managing-Director of National Iranian Gas Exports Company said on June 1st that current infrastructures has a capacity to deliver more 1.2 bcm/a of gas to Turkey, but if Turkey installs compressors on their own soil, Iran can deliver more 2 bcm/a of gas to Turkey.

He said that Iran has offered to build thermal power plants in Turkey and feed them with Iranian gas.

Iran’s ambassador to Turkey hasn’t revealed any figure, but for significant increase in gas export, Iran must construct the 1850-km 9th cross-country pipeline, which would start from South Pars gas field to Turkish borders and cost $6 billion.

Iran has also announced that it is keen to deliver gas to Europe through Turkey.

Iranian Foreign Minister Mohammad Javad Zarif said on June 5th that Tehran and Moscow are not currently negotiating Iran’s possible participation in the Turkish Stream gas pipeline project, aimed to deliver 63 bcm/a of Russian gas to Turkey and EU.

A week prior to Zarif's comments, the National Iranian Gas Company commentrd that Iran might use the Turkish Stream gas pipeline to deliver gas to Europe, if that route is the most ideal.