Iran to seek compensation over Turkey gas line

Iran to seek compensation over Turkey gas line

Gas pipeline closed last week; Iran blamed Kurd rebels; Tehran to seek compensation over slow repairs -news agency; Ties with Ankara under strain over missile shield and Syria

September 27, 2011 2:29 by Reuters

Iran will demand compensation from Turkey over what it sees as unacceptable delays in repairing a pipeline carrying Iranian gas, the semi-official Mehr news agency reported on Tuesday.

The report comes as relations between the countries are under strain due to Turkey’s decision to host a NATO missile shield and Prime Minister Tayyip Erdogan’s tough stance on Syria’s crackdown on anti-government protesters.

Last week Iran halted gas flows through the pipeline after a request from Turkey which said it wanted to check for a possible technical fault.

National Iranian Gas Company (NIGC) Managing Director Javad Oji was quoted by daily newspaper Iran on Sunday as saying Kurdish rebels had blown up the pipeline, forcing its fourth closure this year. Iran and Turkey are both engaged militarily with the militants.

Mehr quoted “economic experts” as saying Turkey was not rushing to re-open the pipeline as it was benefiting from importing cheaper Russian gas and would cite force majeure for the closure, allowing it to avoid paying compensation for the problem.

“Considering Turkey’s delays in repairing the damaged gas pipeline which exports Iran’s gas, the National Iranian Gas Company (NIGC) demands compensation from Botas,” the report said, referring to the Turkish state pipeline company.

Iran’s Oil Ministry was not able to immediately comment on the report.

NIGC’s Oji has previously said that according to the contract if one of the parties fail to fulfil its commitment it had to pay compensation, Mehr said.

“Since the provision of security on Turkish territory is the responsibility of that country, and such incidents have happened several times, Botas has to compensate for the delays,” Mehr quoted Oji as saying.

Under the terms of a contract signed in 1996, Iran has to deliver 10 billion cubic metres annually to Turkey, and if either side fails to fulfil its commitment, it is liable for compensation, Mehr said.

Turkey paid $600 million in compensation to Iran in 2009 due to a shortfall in gas purchases, it added.

Although Iran and Turkey are fighting a common enemy in the Kurdish region and have enjoyed close relations in recent years, Erdogan’s comments about Syrian President Bashar al-Assad, including the prediction he would be ousted “sooner or later” by his own people, have irked Tehran.

Potentially even more problematic is Turkey’s green light to NATO’s missile shield which Iran sees as a threat to its own defences, particularly as both Israel and the US have left open the possibility of military strikes to stop Iran getting nuclear weapons. (Writing by Ramin Mostafavi; Editing by Robin Pomeroy and Jason Neely)