Iran Ready to File ICA Case in Gas Row With Turkmenistan

Tehran is ready to file a case with the International Court of Arbitration over the quality and price of gas it receives from Turkmenistan, Oil Minister Bijan Namdar Zanganeh said on Monday, as a dispute between the two countries over payments escalates.

The Central Asian nation stopped gas exports to Iran in January 2017, saying it was owed $1.5-1.8 billion for gas it had delivered to Iran, Reuters reported.

Iran, which disputes the claim, has imported Turkmen gas since 1997 to supply its northern region, especially in winter, even though it has large gas fields in the south.

“They claim Iran owes them $1.5 billion over the gas exports, but we believe this figure is not correct,” Zanganeh was quoted as saying by IRNA.

Zanganeh said Iran was ready to take the dispute over price to the International Court of Arbitration.

“Our other complaint is about the quality of gas exported from Turkmenistan,” he said.

Hamidreza Araqi, the managing director of National Iranian Gas Company, had said in December that Tehran would prefer dialogue to resolve the disputes rather than resorting to international arbitration.

Araqi recently said Tehran was still interested in purchasing natural gas from Ashgabat, "but if they do not agree to lower their prices as per contractual terms, they will have to deal with the issue in the International Court of Arbitration".

According to NIGC, the debt dates back to the sanctions era when Iran was not able to do business with most countries due to banking restrictions. Iran cleared a big portion of its unpaid debt by providing Turkmengaz with goods and engineering services. The government is taking measures to ensure gas supply stability in the cold season after the country temporarily entered the emergency mode, following the unexpected halt in Turkmen supplies early last year.