Negotiations between the National Iranian Gas Company and Botas, Turkey's state oil and gas company, to renew a natural gas contract that expires in 2026, is underway, but no deal has been made yet, the head of the state-run NIGC said.
“Turkey is in talk with other gas suppliers, including Russia and Azerbaijan, and clinching ew deals with them will certainly affect the terms of its agreement with Iran,” Hassan Montazer-Torbati was also quoted as saying by ILNA.
Turkey has let its private sector play a more active role in importing gas and signing contracts with suppliers and “I believe we should follow the same policy sooner rather than later,” he added.
Oil and gas sectors in Iran have long been monopolized by the government.
Put it simply, all oil- and gas-related deals are tightly controlled by state-run companies and the private sector is not allowed to conclude any upstream agreements.
NIGC uses the ninth Iran Gas Trunkline (IGAT-9), stretching over 2,000 km, to transfer 30 million cubic meters of gas from Asalouyeh, Bushehr Province, to Turkey.
IGAT is a series of nine large diameter pipelines built to supply gas from refineries in the south (Khuzestan and Bushehr provinces).
“Securing a long-term deal will not be as easy as the one signed in 2001 because now Ankara has a larger range of suppliers to choose from. Turkey is emerging as a more adept gas consumer and negotiator,” Amirhossein Zamaninia, the deputy oil minister for international affairs, said.
The two companies were supposed to start talks on the new contract in 2020, but that was postponed due to the Covid-19 pandemic.
“Given the nature of long-term international agreements, such talks normally are interconnected with foreign policy issues and geopolitical considerations,” he said.
Economic experts and analysts have said energy diplomacy and a coherent foreign policy should be at the forefront of Tehran’s gas export strategy.
Grappling with financial problems and lack of advanced technology, it is crucial for Iran to adopt a balanced approach to its gas strategy that includes geopolitical considerations and market realities.
As per a 25-year deal, NIGC started selling gas to Turkey in 2001 and is the second largest gas supplier to the neighboring state after Russia.
