Free Gas Export to Turkey Sparks Controversy in Iran

natural gas

Iran’s free gas export to Turkey has given rise to a considerable controversy in the country with some calling it a great loss inflicted on the national treasury for which the incumbent government is to blame, and some saying that Ankara has already paid for the gas it is receiving from Tehran for free.

The former Iranian oil minister, Rostam Qassemi, maintains that the officials at the country’s incumbent government are to blame for an international court ruling ordering Iran to export free gas to Turkey.

He has slammed the officials of the President Hassan Rouhani’s administration for their failure to effectively defend the rights of the Iranian nation, saying this has led to the issuance of a verdict by the International Court of Arbitration in Turkey’s favour, requiring Tehran to send free gas to Ankara.

In 1996, Iran had signed a contract to export up to 10 billion cubic meters of gas per year to Turkey over 25 years. But Turkey’s state oil and gas company, Botas, appealed in March 2012 to the International Court of Arbitration saying that Tehran had overcharged them for the gas it sold to them. As per the ruling, Iran should pay $1.9 billion in compensation to Turkey. This amount will be paid in instalments.

On May 27, Iran’s Oil Minister Bijan Namdar Zanganeh said the country is currently not receiving any money from Turkey for the export of gas to clear its debts under an International Court of Arbitration ruling.

Commenting on the dispute, Qassemi said the case was brought to the court by Turkey in 2015, not 2012, when Mahmoud Ahmadinejad was Iran’s president.

“As per the case, the Turkish government had complaints about the price of the [gas] contract and had made an appeal to international tribunals. These gentlemen claim that they have developed cordial relations with other countries. Nevertheless, currently, we see that due to their inability to effectively defend the Iranian nation’s rights, a heavy loss have been inflicted on the country’s treasury.”

He said people should judge the performance of these statesmen.

Judiciary Not Engaged Yet

Commenting on the same issue addressing a press conference on May 31, Gholam-Hossein Mohseni-Ejei, the Iranian Judiciary spokesman, said Iran’s Judiciary has not examined the issue yet.

He added Iran’s Justice Ministry has also made no move in this regard.

Call for Removal of Ambiguities

On the same day (May 31) in an open session of the Iranian Parliament, Alireza Salimi, an Iranian lawmaker, called on the oil minister to provide convincing explanations and remove the ambiguities about the issues raised about the free gas exports to Turkey.

Oil Ministry’s Response

In response to Qassemi’s claims, the Iranian Oil Ministry said the forfeit which, as per the ruling by the International Court of Arbitration, needs to be paid to the Turkish side, is, in fact, their own money which they, based on the then formula for estimating the gas price, had paid to Iran.

The oil ministry said at present, the Turkish side, citing the legal terms and conditions of the contract as well as the tribunal’s ruling, wants Iran to, in conformity to an accepted international norm, reimburse the extra money it had paid in the past for purchasing Iran’s overpriced gas.

Iran is even not mandated to pay back the money in cash. They will receive a certain volume of gas for free in return for the additional money they had paid. Thus, no losses have been inflicted on Iran’s treasury, the ministry explained.

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