Turkey-Iran natural gas supply issues

During a visit to Iran Turkish PM Erdogan signed an agreement under which Iran will provide natural gas to Turkey for re-export to Europe. However Azerbaijan political analyst Rasim Musabekov thinks that this project cannot be easily implemented, saying that Iranian companies have no experience of extracting natural gas from the Persian Gulf and cannot attract the huge international resources without which the project of exporting large quantities of Iranian gas to Europe will not be viable.

Musabekov thinks that in the forthcoming 5-10 years not much Iranian gas will appear on the European market. Some analysts think that further development of the Ankara-Tehran transport link will eventually diminish the role of Azerbaijan in the region, but Musabekov believes the importance of this link is exaggerated due to Iran’s present difficulties in attracting international investment. He also thinks that cooperation with Iran will not be developed at the expense of reducing Ankara’s cooperation with Baku, as Turkey and Azerbaijan are strategic partners.

Meanwhile today, November 16, Turkey and Azerbaijan will resume negotiations on finalising the price of Azeri gas exported to Turkey. A special formula has been elaborated for determining this price. Until April 2008 Turkey paid USD 120 for 1,000 cubic metres of Azeri natural gas. Some suggest that the new price will be around USD 250.