Translated material
Gas cycle
While Turkmenistan and Iran are in conflict, Gazprom has increased supplies to Turkey
The traditional New Year's shutdown of interstate gas supplies still happened. This time, Turkmenistan and Iran became participants in the price conflict. Ashgabat, having managed to raise the price for Russia from 100 to 140 dollars (annual average) per thousand cubic meters, made a similar offer to Tehran. However, until the end of last year, negotiations were unsuccessful, and on December 29, exports of Turkmen gas to Iran were stopped. A compromise has still not been found. Iranian officialdom announced its intention not to begin negotiations until supplies are resumed and threatened to completely abandon purchases of blue fuel from Ashgabat. Turkmen authorities claim that the shutdown is related to technical work on the gas pipeline and that resolving the financial issue could speed up its completion. What makes the situation more dramatic is the fact that at the beginning of the year, Iranian territory was hit by a severe winter for those places, with frost and snowfall.It is not surprising that Tehran, having lost its gas supply from Turkmenistan, stopped exporting fuel to Turkey. She, in turn, requested additional volume from Gazprom, which is now supplied via Blue Stream.
Turkmenistan exports about 50 billion cubic meters of gas per year. Of these, 42 billion are purchased by Gazprom, and another 7-8 billion cubic meters are supplied to Iran for the needs of its northern territories. Moreover, in recent years, Tehran has managed to obtain more attractive gas purchase conditions than the Russian company. So, in 2007, when Gazprom paid Turkmengaz $100 per thousand cubic meters, Iran bought fuel a quarter cheaper.
The new president of Turkmenistan, having defeated Gazprom, which, despite having a three-year contract with a fixed price of $100, agreed to pay more, apparently decided to build on its success in the Iranian direction. In addition, he is clearly counting on political attention from the United States in exchange for the admission of American companies to the hydrocarbon sector of Turkmenistan (the last negotiations on this matter took place the other day when a delegation of senators led by Richard Lugar came to Ashgabat from Washington), and tough the position regarding exports to Iran is clear and logical.
However, officially Ashgabat continues to talk about preventive work on the gas pipeline (which is never carried out in the middle of winter). “The Turkmen side previously reported that we are talking about the suspension of gas supplies to Iran for technical reasons related to the need to carry out repair and maintenance work on the relevant gas pipeline,” the Turkmen Foreign Ministry said in a statement issued on Sunday morning. -- Such work is carried out in accordance with accepted technological norms and standards and requires a certain time. Along with this, the completion of repair work is also associated with resolving issues of their financing. In this regard, it should be noted that the Iranian side’s failure to fulfill its obligations to pay for previously supplied gas from Turkmenistan is holding back the timely completion of repair and maintenance work.”
Meanwhile, Tehran, which is in a state of siege, is not going to succumb to blackmail. “Turkmenistan should first resume gas supplies and then hold a discussion (on the price), Iranian Oil Minister Gholam Hossein Nozari told the Fars news agency. “Otherwise we will declare that we do not need Turkmen gas.”
Iran has the second largest gas reserves after Russia (about 27 trillion cubic meters, according to BP Statistical Review). However, it produces approximately 90 billion cubic meters per year, which are used to cover domestic needs. Tehran began sending small volumes for export to Turkey only after it signed a 20-year gas purchase agreement with Turkmenistan four years ago. Imports of 20-23 million cubic meters of Turkmen gas per day last year allowed approximately the same volume to be sold to Turkish Botas.
Turkey's losses will once again be compensated by Gazprom. Last week, the Russian company announced that, at the request of its Turkish partners, since December, Botas has been exporting 40 million cubic meters per day via Blue Stream instead of the planned 30 million. “Currently, the total volume of supplies to Turkey exceeds the contract volume,” they emphasize in “ Gazprom". However, as you can see, Gazprom was unable to replace Iranian gas with its own in full.
Tehran will soon expect proposals from Gazprom on the company's participation in the development of Iran's oil and gas reserves, Oil Minister Gholam Hossein Nozari said yesterday. “We had serious discussions with the management of Gazprom,” the ISNA news agency quoted a senior official as saying. “We agreed that we would receive their proposals by mid-March.” According to him, Gazprom expressed interest in the development of oil and gas fields in Iran, geological exploration, as well as gas pipeline projects.