Iran to file arbitration lawsuit against Turkmenistan over price and quality of gas


ASHGABAT (TCA) — Iran plans to take Turkmenistan to international arbitration over the price and quality of natural gas it has imported from the Central Asian neighbor, Iran’s PressTV reported.

Iran’s Minister of Petroleum Bijan Zangeneh was quoted as saying on January 29 that Iran plans to sue Turkmenistan’s state gas company TurkmenGaz over the quality of the delivered gas. “We have another complaint to file with the International Court of Arbitration in order to have the company reconsider the price of the exported gas because we believe it is too high and has to be lowered,” he said.

Iran’s complaint has three parts: Turkmenistan’s cutting off the gas supply without prior notice on 1 January 2017, low quality of the gas, and the high price, Iran’s IRNA reported.

Turkmenistan stopped gas exports to Iran on 1 January 2017, demanding quick payment of what it views as arrears which are disputed by Iran.

The row relates to Iran’s imports of gas for distribution in its northern provinces, especially during winters, because the country’s natural gas fields are mostly located in the south.

Turkmenistan claims Iran owns it about $1.8 billion, but Zangeneh reiterated that the figure is not correct.

Turkmenistan’s halt to gas exports last year came just after Zangeneh said the two sides had reached a temporary agreement to continue the supplies.

The dispute dates back to the exports between 2007 and 2008 when freezing winters led to severe shortages across 20 Iranian provinces, forcing the country to raise gas imports from its northeastern neighbor.

At the time, Turkmenistan used the occasion to demand a nine-fold hike in the price up to $360 from $40 for every 1,000 cubic meters of gas.

Iran imported about 35-40 million cubic meters of gas a day from Turkmenistan under a deal which had stood for 20 years.

Sergey Kwan