|
Turkish Official Says Turkey Will Not Sign $3.5 Billion Gas Deal With Iran Due To Disagreement Over 'Buy-Back' Condition
Iran and Turkey signed a preliminary deal in 2007 under which Turkey agreed to carry natural gas from Iran and Turkmenistan to Europe and to develop three gas fields in Iran. However, contrary to expectations the deal was not signed during the Iranian President Mahmoud Ahmadinejad's two-day visit to Turkey last week. Under the preliminary agreement Turkey would produce 20.4 billion cubic meters of natural gas from Iran's South Pars gas field. The joint investment of the two countries would amount to $3.5 billion.Under a buy-back contract Turkey would sell to Iran the gas that it would develop for a low price, and would be asked to pay a higher price to Iran when purchasing back the natural gas. The state-run National Iranian Oil Company has recently signed similar buy-back contracts with Indonesia, Italy and Croatia. However, the Turkish energy official stated that the buy-back contract offers 'serious risks' to Turkey in terms of pricing. Turkey wants to buy gas directly from Iran, and would like Iran to guarantee its continued contribution to investment. The Turkish official was quoted as saying, "The investment model for oil and gas system in Iran is not in a language that investors can understand. Iran must develop new investment models and open the way for investments from countries like Turkey. Iran must soften its buy-back model". Turkey's Energy Minister, Hilmi Guler, has denied rumors that pressure form the White House had prevented Turkey from signing an energy deal with Iran. He said that Turkey would not sign under present risky conditions and expressed hope that the negotiations with Iran would continue and would be concluded within a month. Source: Haberturk, Turkey; Presstv, Iran, August 24, 2008
Posted at: 2008-08-26
| 
