World's Energy

2 January 20098 - Upstream OnLine - Iran and Turkmenistan have agreed on the price the Islamic Republic will pay for natural gas it imports from its north-eastern neighbour for the next six months, a senior official said. The Oil Ministry website Shana quoted the head of the National Iranian Gas Export Company, Reza Kasaizadeh, as saying the price would stay "fixed" during the first half of 2009. But Iranian media did not give details about the price and make clear whether it represented an increase or not from 2008. The announcement came as Russian gas export monopoly Gazprom said it had completely cut off gas supplies to Ukraine but was maintaining deliveries in full to customers in the European Union. Iran sits on the world's second-largest gas reserves after Russia, but it has been slow to develop its resources, and faced a gas shortage last winter when Turkmenistan stopped supplies of up to 23 million cubic metres per day citing technical issues. Gas imports from Turkmenistan resumed in April. Iran has previously said Ashghabat wanted to be paid more for its gas. "It was agreed that Turkmenistan's gas would be imported to the country (Iran) with a fixed price in the first six months of 2009," Kasaizadeh was quoted as saying by Shana. The Hamshari newspaper quoted him as saying: "In view of the goodwill by the Turkmen side and in view of the current market conditions, the two parties agreed the price of (exporting) gas from this country to Iran would remain unchanged for the next six months." Another senior Iranian energy official told Reuters he had heard the two sides had signed a contract but he did not yet know its content. Iran uses the Turkmen gas to supply a northern region of the country that is difficult to reach from Iran's national gas grid and its huge reserves in the south. Iranian Oil Minister Gholamhossein Nozari last week said Iran could produce enough gas to meet domestic demand even without Turkmen imports and that Tehran had brought extra supplies onstream to prevent a repeat of last winter's shortage. The Islamic state has long sought to promote itself as a transit route for oil and gas from central Asian states but the US, which has not had diplomatic ties with Tehran since 1980, has been pushing for alternative export channels.