News ID: 175338
Published: 0703 GMT January 08, 2017

Iran in no need of Turkmenistan gas

Iran in no need of Turkmenistan gas

By Reza Padidar

Iran and Turkmenistan share a common border of around 1,000 kilometers, which helps the two nations benefit from regional trade. The Central Asian country has also been regarded as a strategic trade partner of the Islamic Republic since it broke away from the former Soviet Union.

Despite such bonds, Ashgabat suddenly halted gas deliveries to Iran under the pretext of a long-running dispute over arrears.

Since the government of President Hassan Rouhani took office in 2013, the National Iranian Gas Company (NIGC) adopted plans to obviate the need for importing gas from Turkmenistan.

Ashgabat knew that sooner or later — with the development of major natural gas fields in southern Iran — the Islamic Republic will not need its gas. This pushed the Central Asian nation to stop gas supplies demanding for prompt payment of its unpaid debts.

The NIGC, however, managed to weather the crisis through pursuing alternative plans such as substituting liquid gas in petrochemical units and power plants.

Turkmenistan has been exporting gas to Iran under a 1997 agreement, but occasionally raises its prices during the winter. In 2006, it suspended shipments and demanded a nine-fold price increase.

Consequently, the former government accepted the price rise for a short period of time.

The ongoing dispute between the two countries pertains to the era that they encountered problems over the sudden price rise.

Turkmenistan has not specified the size of the debts, although the figure has been reported to be between $1.8 billion and $5.6 billion.

The huge difference stems from arguments between the domestic political groups which intend to take advantage of the dispute.

Such arguments run counter to national interests because the dispute between Iran and Turkmenistan is a national matter rather than a factional one. 

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