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Turkmenistan Stops Gas Exports to Iran

Reuters
Monday, 31 Dec 2007 | 9:36 AM ET

Turkmenistan has stopped natural gas exports to Iran, causing winter shortages in some parts of its neighbour, Iranian officials said on Monday.

The major Central Asia producer blamed technical problems but some Iranian media reports suggested it had halted deliveries because it wanted to raise the price of gas.

Turkmenistan normally supplies 5 percent of Iran's gas consumption with 20-23 million cubic metres per day, the National Iranian Gas Company said.

Turkmen officials were unavailable for comment on Monday.

Turkmen media have said an Iranian delegation visited Ashgabat on Dec 26-27 to discuss gas prices for next year.

"In their comments, some (Iranian) officials have said that Turkmenistan has doubled the price of gas," the semi-official Mehr News Agency said, without quoting any of them by name.

Ebadollah Ghanbari, who heads the public relations unit of the national gas company, said Turkmenistan on Saturday slashed exports to Iran by half to 10 million cubic metres, before stopping deliveries completely a day later.

"In an official letter they said it was due to technical problems," he told state broadcaster IRIB. "Since yesterday evening Turkmenistan has completely cut its gas exports to Iran."

Despite its massive gas reserves, Iran has been a net importer of gas since 2002.

"ODDLY TIMED"

The cuts caused difficulties in parts of northern Iran in the middle of winter. Some hospitals were affected, bakeries faced shortages and gas was turned off to some government offices to make more available for households.

"Because of the sharp decrease in the pressure of natural gas many restaurants and motels ... are completely or partially closed," state radio said.

The state gas company urged Iranians to use less energy.

Jonathan Stern of the Oxford Institute for Energy Studies described the timing of the supply disruption as odd and said it might be linked to Turkmen price demands.

"It's very oddly timed, nobody does 'repairs' at this time of year unless there's been some kind of accident which is not mentioned here," Stern told Reuters.

"With Russians paying 30 percent more from tomorrow and 50 percent more from July, I would expect the Iranians to be facing similar demands," he said.

Stern was referring to a price agreement in November between Russia's gas export monopoly Gazprom and Turkmenistan, which now charges $130 per 1,000 cubic metres.

But Iranian Foreign Ministry spokesman Mohammad Ali Hosseini said Turkmenistan was working to sort things out. "There are a certain number of technical problems and they are trying to solve the problems over there in Turkmenistan," he said.

Iran sits on the world's second largest gas reserves after Russia. But sanctions, politics and construction delays have slowed gas development, and analysts say it is unlikely to become a major exporter for a decade.

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