New Pipeline Will End Iran's Need for Turkmen Gas

“By launching the Damghan-Neka pipeline, there will be no need for importing Turkmen gas. But we will continue to swap Turkmen gas as part of a national policy to expand regional relations,” Hamidreza Araqi was also quoted as saying by Shana, the official news agency of Oil Ministry, on Tuesday.

The project is part of an expansive network of pipelines used to transfer natural gas from the giant South Pars field in the Persian Gulf all the way to the northern regions.

"The pipeline will have the capacity to deliver 35 million cubic meters per day of natural gas to the northern provinces, which help sustain gas supply to the region even if the pause in the import of natural gas from Turkmenistan persists," Financial Tribune quoted Araqi as saying.

The government is taking measures to ensure gas supply stability in the cold season after the country temporarily descended into emergency mode, following an unexpected halt in Turkmen supplies late last year.

The Central Asian state unilaterally halted natural gas supplies to Iran in December in violation of the terms of its contract with Iran. The country increased gas prices ninefold to $360 per 1,000 cubic meters from $40.

Pointing to the terms of the contract with Turkmenistan, Araqi had earlier said, "Turkmengaz cannot unilaterally cut off the gas supply even if Iran had unpaid dues. The company has alleged that Iran should settle roughly $2 billion in unpaid dues for gas deliveries."

According to NIGC, the debt dates back to the sanctions era when Iran was unable to do business with most countries due to banking restrictions.

Iran cleared a big portion of its unpaid debt by providing Turkmengaz with goods and engineering services.

Iran's gas production capacity has reached 885 million cubic meters per day, the latest data show.