Turkey buys less natural gas from Azerbaijan

Turkey failed to receive the minimum amount of natural gas it had pledged to buy as per the gas trade agreement with Azerbaijan, signed in 2013, as the state-owned Turkish Pipeline Corporation (BOTAŞ) had to use its transportation capacity to take the Iranian gas that it had previously bought in a take-or-pay scheme, Today's Zaman has learned.

Since both Iranian and Azerbaijani gas are being transported through the same pipeline, which can only receive one of them at once, Turkey had to give up some of the Azerbaijani gas.

The deal with Azerbaijan requires the sale of 6.6 billion cubic meters of gas to Turkey, while the minimum amount Turkey must receive is 5.2 billion cubic meters. The remaining gas must be paid for, but the amount above the minimum receivable requirement may be received in the next four years. BOTAŞ was only able to take 3.8 billion cubic meters of gas from the country in 2013.

According to sources close to the energy authorities, unless Turkey invests to develop the capacity of its current transportation grid by installing a new pipeline or building compressor stations, the same problem will occur every year. BOTAŞ has declined to comment on the issue.

Iran is one of Turkey's three major natural gas suppliers, along with Russia and Azerbaijan. Iran's gas is the most expensive alternative, as Turkey pays $480 for 1,000 cubic meters. Russian gas costs $417 for the same amount, while the least expensive gas comes from Azerbaijan's fields, at $341 for 1,000 cubic meters. Turkey has begun litigation against Iran through the International Court of Arbitration for the high price of its gas. The lawsuit is still ongoing.

Turkey's BOTAŞ was compelled to decrease the amount it purchases from the three suppliers in 2008 following a sharp drop in natural gas demand in Turkey from both households and operators of natural gas-run power plants due to the price hikes that year. In the period from 2008 to 2010, BOTAŞ paid a total $2.9 billion for the gas it purchased, but it could not receive the full amount due to the lack of demand in the domestic market.

According to separate agreements with these suppliers, Turkey has five years to receive the gas it has bought from Iran and Russia. For the Azerbaijani gas, the time limit is four years. The Energy Ministry had previously announced that the purchased gas would be received by the end of 2014.

Bakudaily.Az