Zanganeh: Gas Dispute With Turkmens Reportedly Settled

Tehran and Ashgabat reached a preliminary agreement to settle a gas dispute before approaching international arbitration, Oil Minister Bijan Namdar Zanganeh said, adding that negotiations are underway to put a permanent end to the issue.

Expressing optimism about the prospects for a negotiated settlement, Zanganeh ruled out the possibility of appealing to the International Court of Arbitration as the two sides are determined to end the dispute in a way that serves the interests of both countries, Mehr News Agency reported.

Reportedly, the two sides have agreed that their gas contract be valid for five years. The Central Asian republic recently threatened to cut gas exports over unpaid dues for natural gas it sold to Iran during the tenure of the previous government in Tehran.

Asked about the volume of natural gas imports from Turkmenistan, Zanganeh noted without elaboration that based on the terms of the new agreement, gas imports from Turkmenistan will rise within the next few days.

“Iran currently imports 10 million cubic meters of gas a day from Turkmenistan,” the minister was quoted as saying.

Stressing that Iran's natural gas output in winter stands at 700 mcm/d, Zanganeh recalled that once all phases of the South Pars Gas Field become operational, gas production capacity will exceed 1 billion cubic meters per day.

Zanganeh also stressed the halt of gas imports from Turkmenistan could have a profound environmental impact.

"Interruption in gas imports will mean less supply of gas feedstock to power plants which will then have to burn more polluting fuels such as mazut," he said, stressing that using mazut in power plants will only add to the worsening air pollution in urban areas, particularly Tehran, which is grappling with alarmingly high levels of air pollution that has closed schools and filled hospitals for the past several years.

Hamidreza Araqi, the managing director of National Iranian Gas Company (NIGC), had played down concerns over a shortage of gas for heating homes and power plants in case the Turkmens unilaterally terminate the gas export contract with Iran.

According to Araqi, plans are in place to speed up gas pipeline laying from the oil and gas-rich southern fields to the north if Turkmen gas is cut off. He said any possible major shortage of gas in the winter months can be avoided if consumption nationwide is reduced by 10%. An estimated 27% of natural gas in Iran is consumed by households. Energy consumption patterns have come under regular censure by experts who have warned that should Iranians not curb consumption of water, gas, gasoline and electricity they should await major disruptions in supplies along with rising, and possibly prohibitive, utility bills.