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Turkmenistan, Iran To Seek Mediation Of $1.8 Billion Gas Dispute

Turkmen President Gurbanguly Berdymukhammedov (file photo)
Turkmen President Gurbanguly Berdymukhammedov (file photo)

Turkmenistan has agreed to seek international arbitration of a dispute with Iran over $1.8 billion Ashbagat says Tehran owes for deliveries of natural gas, Turkmen media report.

The energy-rich Central Asian state halted shipments of natural gas to Iran at the start of the year, saying Iran owed $1.8 billion for supplies it never paid for.

Myrat Archaev, the head of Turkmenistan's state-controlled Turkmengas company, reported that negotiations with Iran over the dispute had been unsuccessful, and the Iranian side had proposed taking the matter to arbitration.

Turkmen President Gurbanguly Berdymukhammedov instructed Archaev to accept the offer to seek mediation in an international arbitration court, according to the Turkmen state news agency and Neutral Turkmenistan newspaper on December 5.

Turkmenistan exported gas to Iran under a 1997 agreement, but occasionally raised its prices during the winter.

In 2006, it suspended shipments and demanded a nine-fold price increase. Iran eventually accepted the higher prices for a short period.

In 2016, Russia stopped buying gas from Turkmenistan. With the cutoff of supplies to Iran, Ashbagat is now left with China as its sole customer.

With reporting by AP and Interfax