Turkey to buy Turkmen Not Iranian Gas

ANKARA (Reuter)–Turkey’s Energy Minister Cumhur Ersumer said Turkey would get Turkmen gas through a pipeline being built with Iran under a $23-billion–23-year gas purchase and pipeline agreement with its eastern neighbor.

In commen’s to reporters on Wednesday night he said Turkey’s focus would be on getting gas from Turkmen’stan rather than Iran because "Iran’s gas production was only sufficient for itself in the foreseeable future."

"Our aim is to get gas from Turkmen’stan to Turkey and maybe later to Europe," he said.

"Gas has no nationality. Where it comes from does not matter. What matters is whether you get it or not," he said.

Asked whether his commen’s meant that the Iranian gas supply deal would be shelved or partly scrapped–he said: "Judge it for yourselves."

Turkey’s former Islamist-led coalition government signed an agreement with Iran in August–1996–to receive gas through a 888-mile pipeline–being built from Tabriz to Ankara.

The initial purchases would start from 1998 at an initial annual rate of three billion cubic meters. The amount would go up to 10 billion cubic meters from 2005. Turkey was to buy a total 190 billion cubic meters over the lifetime of the agreement.

The accord caused concern in the US administration–which passed the so-called d’Amato law in August–1996–to punish firms investing at least $40 million in energy projects in Iran and Libya which it accuses of being involved in "terrorism."

Turkey later said the deal would not violate US law as Turkey and Iran would build their respective sections of the pipeline themselves–without Ankara investing money in Iran.

Both countries have already begun constructing the pipeline on their territories.

Ankara said the Iran-Turkey pipeline would be used to transport the gas from Turkmen’stan–which–according to an agreement signed earlier this year–would supply Turkey with three billion cubic meters a year from 1999.

"The US administration also said getting gas from Turkmen’stan does not violate their d’Amato law," Ersumer said.

The US government said last month Turkey’s purchase of gas from Turkmen’stan–which has the second largest gas reserves in the world after Russia with 21 trillion billion cubic meters–would not breach the law despite the use of the pipeline in the Iran deal.

Ersumer said Iran would benefit from the Turkmen deal as it would charge transit fees on Turkey’s purchase of gas from Turkmen’stan.

"It would take Iran’sometime to reach a level to have gas for export purposes. Therefore it has no gas to sell at the moment," he said.

Energy analysts said Turkey would initially get Turkmen gas but would eventually buy from Iran as well. It would otherwise have to pay a fine for unilaterally canceling part of or the whole agreement with Iran.

"I think gas will come from both suppliers although it will first be from Turkmen’stan. Iran will also sell later," said one analyst–who declined to be named.


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