Iran to seek arbitration over termination of gas flow from Turkmenistan

By bne I January 5, 2017

The National Iranian Gas Company (NIGC) intends to take its recent gas dispute with Turkmenistan to international arbitration, Mehr News Agency reported on January 4, citing the company’s response to the Turkmen foreign ministry.

The dispute arose after Turkmenistan stopped gas exports to Iran on January 1 over $1.8bn owed by Iran for gas exports. Turkmenistan had already suggested taking the issue to the court, as both countries issued warnings to each other throughout December. Tehran claimed in a statement that it had paid the money that had been owed to TurkmenGaz for over a decade.

“In recent years, the National Iranian Gas Company, in good faith and in different ways, has retired its outstanding debts to Türkmengaz which amounted to over $4.5bn,” NIGC’s latest statement said. “Therefore, the remaining debt pertains to sanction years during which, despite restrictions on direct payment, considerable sums were handed over to the Turkmens in the form of goods and service exports in addition to the issuance of warranties worth hundreds of millions of dollars for exporters of goods and services.”

NIGC added that “Türkmengaz has committed numerous violations of the terms of the contract, including in the quality and quantity of deliveries, which are subject to penalties provided in the contract”.

Iran has vast reserves of gas in the south of the country but has a gas swap deal with Turkmenistan to top up supplies during the cold winter months.

Related Articles

Tashkent announces plan for Uzbekistan-Turkmenistan free trade zone

An Uzbekistan-Turkmenistan free trade zone (FTZ) is to be established in Shovot district of Uzbekistan's northwestern Khorezm region, Trend reported on February 29. According to a presidential ... more

Trade between China and four of five “Stans” expands at rapid rate in 2023

Trade between China and the countries of Central Asia expanded at a rapid rate in 2023, with the exception of Turkmenistan, according to data published by China’s customs agency, or GACC. ... more

Accor signs for first hotel in Tajikistan but report says investors remain hesitant to put money into Central Asia hotels

French hotel giant Accor has signed an agreement to open its first hotel in Tajikistan. A Swissôtel 243-room property within an 18-floor building, located in the the centre of the capital ... more

Dismiss