Turkey Seeks to Secure Gas Trade with Iran

---

Researched by Industrial Info Resources (Sugar Land, Texas)--Turkish Prime Minister Tayyip Erdogan said that Turkey will continue to buy natural gas from Iran as the U.S. plans to tightens its grip on trade. In a televised press conference in Istanbul after talks with Russian PM Vladimir Putin, Erdogan said that Turkey will make payments in whatever way is required to maintain supplies of a "strategic" necessity. Currently, Turkey imports 20% of its natural gas needs from Iran.

The legislation does not block Iran from selling natural gas, but follows Turkish statements that Iran is using its payments for gas to buy gold in Turkey and ship it back to Iran.

Erdogan said Iranian gas imports were vitally important for Turkey, which depends heavily on imported energy and is struggling to diversify its suppliers. He added that the government had told the relevant parties the trade would continue.

"We are paying for the gas with Turkish lira into the bank," said Ali Babacan, Turkey's Deputy Prime Minister, in a parliamentary commission in Ankara on November 16. "Because Iran cannot transfer the money to the country, it is withdrawing money, buying gold and taking the gold. This practice is a result of U.S. sanctions against Iran."

Currently, Turkey takes more than 90% of Iran's gas exports, while Turkmenistan takes about 10%. In 2011, Iran exported more than 8 billion cubic meters to Turkey.

Turkey's gas contract with Iran runs until 2026, with the volume of gas due to rise. The sales over the 2010-11 period were worth $6 billion.

Russia supplies 60% of Turkey's gas imports. Putin said Russia will consider expanding the 16 billion-cubic-meter-per-year Blue Stream pipeline under the Black Sea if it can find a suitable Turkish partner.

Also, Turkish Energy Minister Taner Yildiz said today that Turkey formally requested 3 billion cubic meters more gas from Russia.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.