Turkey now also buying Turkmen gas through Iranian pipeline

Oct 20, 1997 02:00 AM

Sept. 4, 1997 Turkey's Energy Minister Cumhur Ersumer said Turkey would get Turkmen gas through a pipeline being built with Iran under the $ 23-billion, 23-year gas purchase and pipeline agreement with its eastern neighbour.
He said Turkey's focus would be on getting gas from Turkmenistan rather than Iran because "Iran's gas production is only sufficient for itself in the foreseeable future."
"Our aim is to get gas from Turkmenistan to Turkey and maybe later to Europe," he said.
Asked whether his comments meant that the Iranian gas supply deal would be shelved or partly scrapped, he said: "Judge it for yourselves."
Turkey's former Islamist-led coalition government signed an agreement with Iran in August, 1996, to receive gas through a 1,420-km (888-mile) pipeline, being built from Tabriz to Ankara. The initial purchases would start from 1998 at an initial rate of 3 bn cmpy. The amount would go up to 10 bn cmpy from 2005. Turkey was to buy a total 190 bn cm over the lifetime of the agreement.
The accord caused concern in the U.S. administration, which passed the so-called d'Amato law in August, 1996, to punish firms investing at least $ 40 million in energy projects in Iran and Libya. Turkey later said the deal would not violate U.S. law as Turkey and Iran would build their respective sections of the pipeline themselves, without Ankara investing money in Iran.
Both countries have already begun constructing the pipeline on their territories.
Ankara said the Iran-Turkey pipeline would be used to transport the gas from Turkmenistan, which, according to an agreement signed earlier this year, would supply Turkey with 3 bn cm a year from 1999. "The U.S. administration also said getting gas from Turkmenistan does not violate their d'Amato law," Ersumer said.
The U.S. government said last month Turkey's purchase of gas from Turkmenistan, which has the second largest gas reserves in the world after Russia with 21 trillion cm, would not breach the law despite the use of the pipeline in the Iran deal.
Ersumer said Iran would benefit from the Turkmen deal as it would charge transit fees on Turkey's purchase of gas from Turkmenistan.
"It will take Iran sometime to reach a level to have gas for export purposes. Therefore it has no gas to sell at the moment," he said.
Energy analysts said Turkey would initially get Turkmen gas but would eventually buy from Iran as well. It would otherwise have to pay a fine for unilaterally cancelling part of or the whole agreement with Iran. "I think gas will come from both suppliers although it will first be from Turkmenistan. Iran will also sell later," said an analyst.

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