Zangeneh: We Will Sue Turkmenistan's Turkmen Gas Company

Iran's Minister of Oil says Tehran intends to sue Turkmenistan's Turkmen Gas Company at the International Court of Arbitration due to "the quality of the delivered gas" and "its high price." Bijan Namdar Zangeneh announced this on Monday, February 9, to the state news agency IRNA regarding the gas dispute between Iran and Turkmenistan, stating that Tehran and Ashgabat are pursuing "mutual complaints against each other." Iran had previously threatened Turkmen Gas for the sudden cut of gas exports to Iran on January 1, demanding compensation from the company. Regarding Turkmenistan's complaint against Iran, the minister stated, "They claim that they are owed $1.5 billion from Iran for gas exports, but we believe this figure is incorrect." Earlier, Gurbanguly Berdimuhamedow, the President of Turkmenistan, had ordered on December 5 to refer the gas dispute with Iran to the International Court of Justice. Zangeneh mentioned that Iran believes "their prices are too high and should be reduced." He also identified another complaint from Tehran against Ashgabat as the "quality of the delivered gas" and added that Iran raised this complaint "in response to Turkmenistan's claim for payment." He noted that these complaints should be referred to the International Court of Arbitration, and Iran does not intend to announce the amount of damages sought from Ashgabat until it officially files its complaint. Hamidreza Araqi, Deputy Minister of Oil, had previously stated that a price reduction was Iran's "condition" for resuming gas imports from Turkmenistan. He added, "If Turkmenistan lowers the gas price in the future, we will buy gas from them, and if Ashgabat does not agree to our requests, we will sue them at the International Court of Arbitration for cutting off gas." Iran and Turkmenistan entered a gas dispute in late 2016, culminating in a complete cut of gas exports to the Islamic Republic on January 1, 2017, due to what Turkmen officials called "claims against Iran." IRNA reported that the dispute between the two countries has a history, noting that Tehran had previously sought to gain Ashgabat's "satisfaction" to ensure gas supply for the northern and northeastern regions of Iran. However, following the latest dispute, the Islamic Republic was unwilling to buy gas at higher prices, and the conflict between Tehran and Ashgabat peaked in early 2017. Turkmenistan unilaterally cut off gas supplies to Iran just two days after signing a five-year extension agreement for gas exports to Iran. The National Iranian Gas Company described Turkmenistan's action as "contrary to the framework of the contract" and urged citizens to conserve gas. The National Iranian Gas Company stated that "in the past three years, gas production has increased to the extent that there is no longer a need for imports, and it can be compensated solely by conserving in power plants, industries, and households during winter." IRNA predicts that due to the "ineffectiveness of negotiations," it seems that the gas dispute between Iran and Turkmenistan will soon be referred to the International Court of Arbitration. In recent years, Turkey has also sued Iran for "overpricing gas," and according to the ruling of the International Court of Arbitration, Iran must return $1.9 billion to Turkey for the overpriced gas. The two countries agreed that instead of cash, Iran would deliver gas to Turkey. Iran's western neighbor has not paid for receiving gas from Iran since January to settle the debt. In this context, Turkmenistan has agreed to refer the gas dispute with Iran to an international court, and Iran has rejected Turkmenistan's proposal for gas transfer to Turkey. Iran has inaugurated a new gas pipeline to reduce dependence on Turkmen gas.