Iran ready to launch int’l arbitration against Turkmenistan over gas supply halt

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TEHRAN (TCA) — Iran has prepared documents to file a lawsuit with the International Court of Arbitration against Turkmenistan for its failure to supply natural gas to the Islamic Republic last winter, Iran’s Tasnim news agency reports with reference to the managing director of the National Iranian Gas Company (NIGC).

“The price of gas, the damage they (Turkmens) inflicted on Iran in winter by cutting off gas supplies, and the quality of gas delivered to Iran are three cases claimed by Iran,” Hamid Reza Araqi was quoted as saying by Shana news agency on May 8.

“Iran’s documents are ready to be submitted to the International Court of Arbitration,” he said, adding that Turkmenistan has been notified of the decision.

However, Araqi said, Iran would not refer the case to the international court if the NIGC and Turkmenistan’s state gas company Turkmengas reach an understanding.

Turkmenistan stopped natural gas supplies to Iran on January 1, 2017 in a dispute between the two countries over unpaid arrears.

NIGC said in a statement on January 4 that over the course of the recent years, it has cleared all its dues and a part of the debt arrears to Turkmenistan’s state gas company Turkmengas in different ways amounting to over $4.5 billion.

“What remains to be paid by NIGC is related to the sanction period. Moreover, even in that period in spite of the impossibility of direct payment due to international sanctions, by the agreement of the Parties, huge amounts were paid to Turkmengas in the form of exporting goods and services,” the Iranian company said.

NIGC also said that even in the case of existence of a debt or delay in payment, Turkmengas shall not be allowed to cut off gas delivery to Iran and such a stoppage shall be a “material breach of the Contract”.

Iran has imported natural gas from Turkmenistan since 1997 for distribution in the north of the country.

Ashgabat claimed that Iran owed it $1.8 billion from sales between 2007 and 2008 when freezing winters led to severe shortages across 20 Iranian provinces, forcing the country to raise gas imports from Turkmenistan.

According to NIGC, Iran currently produces 700 million cubic meters of gas per day and the import from Turkmenistan is only 2 percent of the country’s gas production.

Sergey Kwan

TCA