A recent example was when the amount of Iranian natural gas Turkey failed to import despite being billed for it reached more than 3 billion cubic meters 2009, at a price tag of $1 billion. Turkey’s negotiations with Iran are attempting to delay implementation of the “take or pay” condition.
Energy Minister Taner Yıldız requested from Iranian Foreign Minister Manouchehr Mottaki during the latter’s visit to Ankara last week a delay in payment for natural gas that was not used by Turkey in 2009. The negotiations between Turkey and Iran are expected to end today, and Mottaki has invited Yıldız to Tehran to address the issue if current talks are unable to bring about a solution.
The failure to import natural gas fixed by the ‘take or pay’ condition amid falling demand puts Turkey in a difficult situation as the country has to now push the limits for a revision in arecent natural gas import deal with Iran |
According to the agreement with Iran, the state-owned Turkish Pipeline Corporation (BOTAŞ) had to accept at least 36.5 billion cubic meters of natural gas from Iran in 2009. However, the company imported only 33.6 billion cubic meters during the year and, according to the agreement with Iran, Turkey must pay almost $1 billion to Iran for the amount of natural gas it did not import due to a fall in consumption and a lack of necessary infrastructure. In 2008 Turkey once again had to pay for the natural gas it did not import. It is predicted that the total cost of the “take or pay” condition will total $1.5 billion for the past two years.
BOTAŞ raised natural gas prices in 2008 whereas, parallel to a decrease in the cost of foreign currency, the company dropped the price of natural gas by 40 percent in the summer of 2009, when consumption is generally not high. BOTAŞ’s price policy has been unable to create more demand for natural gas. Furthermore, many industrial companies have looked to alternative sources to meet their energy needs.
The inadequacy of the East Anatolian pipeline and technical problems in the compressor station at Sivas are considered two important factors behind why Turkey did not import the amount of natural gas stipulated in its agreement with Iran.
Official figures indicate that in 2009 a total of 33.62 billion cubic meters of natural gas were imported. BOTAŞ sold 32.14 billion cubic meters to companies and households and stored the rest. However, as the storage tanks were filled to capacity with natural gas not consumed in 2009, the state company had to stop importing gas from its providers.
