No matter how the officials of Turkey and Iran stated that there are no problems between the countries, it is obvious that along with the political differences, Ankara and Tehran have also differences in a price on the Iranian gas supplied to Turkey.
As for the political differences, this is mainly connected with Syrian, Iraqi and Yemeni crises.
Ankara repeatedly appealed to Tehran that the price on Iranian gas does not suit Turkey. As a result, Ankara appealed to the International Court of Arbitration in March 2012 regarding the price on “blue fuel” supplied from a neighboring country.
In its turn, Iran said that it is willing to consider this issue only if Turkey doubles the volumes of gas supplies from Iran. But while waiting for the decision of the court of arbitration, Ankara refused from this.
According to the Turkish media, Turkey buys Iranian gas at $490 per 1,000 cubic meters. The country pays $ 335 per 1,000 cubic meters for Azerbaijani gas, which is supplied via the South Caucasus gas pipeline (Baku-Tbilisi-Erzurum). Russian gas costs Turkey $ 425 per 1,000 cubic meters.
Turkey has contracts with Iran for the supply of 10 billion cubic meters of gas per year, with Russia – 20 billion cubic meters of gas, Azerbaijan – 6.6 billion cubic meters of gas.
Moreover, Turkey signed agreements with Algeria and Nigeria for the supply of 4.4 billion and 1.2 billion cubic meters of liquefied natural gas per year, respectively.
Turkey buys 95 percent of Iranian gas, while Armenia buys the rest five percent.
The share of Iranian gas in Turkey is 20 percent.
Ankara hopes that the court of arbitration will make a decision on the price of Iranian gas supplied in May 2015.
But this does not mean that the arbitration court will make a decision in favor of Turkey.
It is not ruled out that if the decision of the arbitration court is against Turkey, Ankara will primarily refuse from the “take or pay” principle in gas supplies from Iran.
Ankara will abandon the “take or pay” principle in the gas relations with Iran in late 2015, Turkish Minister of Energy and Natural Resources Taner Yildiz said.
He also said that Turkey completely abandoned the “take or pay” principle in gas supplies from Russia in 2014.
In case of Ankara’s refusal from the “take or pay” principle with Iran, Turkey will also reduce the Iranian gas supplies, by increasing the Russian gas supplies.
But all this will last only until 2018, as Turkey will receive Azerbaijani gas via the Trans-Anatolian gas pipeline (TANAP) beginning from 2018.
TANAP’s initial capacity will be 16 billion cubic meters of gas per year. About six billion cubic meters will be delivered to Turkey, and the rest – to Europe.
Taking this into account, one can say that TANAP will ensure energy security of Europe. Moreover, it will also partially weaken Turkey’s dependence on Iranian gas.
Author: Rufiz Hafizoglu, the head of Trend Agency’s Arabic news service