Iran has agreed to pay $1.9bn in compensation to Turkey following last year's International Court of Arbitration gas price dispute ruling in favour of Ankara, Anadolu Agency reported on January 24 citing the semi-official Iranian Students' News Agency.
Only Russia supplies more natural gas to Turkey than Iran, which annually supplies its energy hungry neighbour with around 10bn cubic metres of gas.
Ankara took the price row with Iran to international arbitration in 2012. In February 2016, a tribunal ordered Iran to discount the price of the natural gas it exports to Turkey by 10-15%.
Ankara and Tehran have agreed on a 13.3% discount, Iran's Deputy Oil Minister Hamid Reza Araqi said.
Turkey’s heavy reliance on imported energy costs it billions of dollars each year. Thus it is constantly seeking to diversify its energy resources and explore alternative energy sources. Turkey is to build two nuclear plants and it is targeting an increase in the share of its renewable energy in terms of total installed power to 30% by 2023.
The country’s energy import bill declined by 30.2% y/y to $24.3bn in January-November last year, thanks to cheaper oil prices, which also fed through to create cheaper gas prices.
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