ANKARA – The details of a July natural gas exploration and transportation agreement between Turkey and Iran, over US objections, are now becoming clearer. According to the agreement Iran will pay 20 percent of profits from the natural gas extracted from the South Pars Basin to Turkey in compensation for exploration costs.
The Turkish Petroleum Corporation (TPAO) will invest around $3 billion in the region. The project, forecast to be completed in seven years, will claim $3.6 billion from Iran with the addition of the 20 percent profit margin. Iran will pay thisbic meters from Turkmenistan to Europe. With this agreement, which allows Turkey to export Iranian and Turkmen gas to Europe, the exploration and extraction of three natural gas fields in the South Pars Basin, which has 14 trillion cubic meters of reserves, will be given to Turkey. The TPAO will operate these fields and has the ability to produce 56 million cubic meters of gas daily. On an annual basis, the company has a production capacity of 20 billion cubic meters.
ERCAN BAYSAL, Todays Zaman
After a visit of Energy Minister Hilmi GÃ¼ler to Iran in the weeks following the gas agreement, another memorandum of understanding was signed between the two countries on electricity. With this memorandum, the construction of three thermal power plants and one hydro-power plant was decided. These plants are estimated to be capable of generating 6 billion kilowatt hours of electricity in total. The locations of the power plants will be determined at a later date.
The agreement was not welcomed by the US, which is trying to expand sanctions on Iran. There is a probability that this agreement will harm Turkish foreign policy due to US objections. The energy minister’s determination vis-Ã -vis the agreement has caused widespread debate. According to energy experts, the reliability of Iran as an energy supplier is questionable.
Turkey insists on joint company for gas transport to Europe
Turkey and Iran, however, could not come to an agreement on the transportation of gas to Europe. Turkey does not accept Iran’s “let us to pay the transit fees for the transportation of gas to Europe” offer. The Turkish Energy Ministry insists on establishing a joint company and selling the gas together. “They have to accept our offer because without us, they cannot sell gas to Europe,” an official from the ministry said. According to Turkey’s offer, the state-owned Turkish Pipeline Company (BOTA?) and Iran would establish a firm to install pipeline from the Pars region to the Turkish border. Another joint company would purchase this gas and sell it to Europe.