Istanbul (Platts)--7Jan2008
Iran has cut off natural gas exports to Turkey, one week after reducing
supplies from 25 million cubic meters/day to around 5 million cu m/day,
Turkish news channel CNBCE reported Monday.
It said Turkish gas importer Botas had called an emergency meeting with
officials at the Turkish energy ministry but that at present the company was
maintaining normal supplies to consumers.
Botas and the Turkish energy ministry were unavailable for comment.
The move has been prompted by Turkmenistan cutting off gas exports to
Iran following a dispute over price, forcing Iran to hold back exports to meet
domestic needs.
The cut coincided with a snow storm that has blanketed much of Iran and
disrupted air and land travel across the oil and gas producing country while
reducing pressure in the country's gas pipeline system.
Iran last week cut gas supplies to Turkey to around a fifth of normal
levels, citing the need to supply its own domestic consumers after
Turkmenistan cut exports to Iran. The latter appeared to be because of a
dispute over prices, although Turkmen officials said it was due to unscheduled
maintenance on the pipeline.
There has been no confirmation from Iran of the cut in exports to Turkey.
OPEC producer Iran has the world's second biggest gas reserves after
Russia but it has failed to develop a viable gas export industry due to very
high domestic demand and a lack of investment in developing its massive South
Pars gas field, forcing Tehran to import 5% of its gas needs from
Turkmenistan.
Turkey is currently its only export market and this is not the first time
that demand surges during the winter season have forced Iran to cut off
supply, raising questions about Iran's ability to meet ambitious plans to
export gas to other markets in the region and to Europe and Asia.
Turkey and Iran had been scheduled to sign a far-reaching gas cooperation
treaty early this year, following an "agreement in principle" announced in
July last year.
The agreement would allow Iran to export gas to Europe via the planned
Nabucco pipeline through Turkey and for Turkey to import Turkmen gas via Iran
and then ship it on to Europe. In addition, Turkey's state upstream operator
TPAO would develop three blocks at Iran's giant South Pars gas field.
However, the future of the agreement was recently thrown into question
when European Commission energy spokesman Ferran Tarradellas said the EU did
not consider Iranian gas as being "necessary" for the Nabucco line.
When the agreement was announced in July last year, Turkish officials
indicated their confidence that the new agreement would signal the end of
problems over the security of Turkey's gas supply from Iran, following
problems during the previous two winters.
Iran cut gas supplies to Turkey to around 7 million cu m/day in January
2006, citing colder than expected weather and problems supplying domestic
customers, and to zero in December 2006 citing the same problems.
Iran supplied an average of 14.6 million cu m/day to Turkey in 2007.
Turkish energy minister Hilmi Guler revealed at the weekend that Turkey
was also suffering from cuts in Russian gas supplies. Turkey imported nearly
51 million cu m/day of gas from Russia in 2007, according to Botas.
Guler implied in the interview that the problem may be caused by Ukraine,
through which the Russian gas transits. Ukraine's new government has started
scrutinizing the previous administration's gas agreements with Russia to see
if they can be renegotiated to get a lower price.
Guler said the situation had become so serious that it could now only be
solved at prime ministerial level and that he would be requesting Turkish
Prime Minister Recep Tayip Erdogan to intercede with Iranian President Mahmoud
Ahmadinejad and Russian President Vladimir Putin.
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