Reuters cited Mr Taner Yildiz energy minister of Turkey as saying that Turkey will start exploration work on Iran’s South Pars gas field in November in a project to export gas to Europe.
Mr Yildiz who is in Iran with Prime Minister Mr Tayyip Erdogan and other Turkish officials was also reported as saying that Turkey was willing to make additional payments to Azerbaijan for gas bought since April 2008 after Baku said Turkey’s terms for transit were unacceptable.
Mr Yildiz said that Turkish state owned exploration and production company Turkish Petroleum would produce an annual 35 billion cubic meters of gas and that at least half would be made available to Turkey to re export to Europe. It was not immediately clear whether the gas would go through the planned USD 11.76 billion European Union backed Nabucco pipeline. Backers of the pipeline have not all supported the use of gas from the Islamic Republic. The US, a Turkey ally has expressed displeasure over Ankara’s gas deals with Iran which is engaged in a standoff with the West over its nuclear program.
He said that Turkish Petroleum will be exploring in the South Pars Field. The work will have started by the first or second week of November. The Turkish and Iranian governments agreed in July 2007 that Turkish Petroleum would produce gas from the field in a project worth billions of dollars that would help Turkey realize its ambition of becoming an energy hub for Europe bound gas and oil. But the Iran deal has been delayed amid objections from Washington, which opposes new energy deals in Iran as part of efforts to isolate Tehran over its nuclear program. Turkey was hopeful a deal could be reached shortly with Muslim ally Azerbaijan over transit of Azeri gas over Turkish territory, seen as key for supplying the planned Nabucco pipeline.
Mr Yildiz said that “There is a possibility of back payments being made to Azerbaijan for gas bought after April 2008.”
Azerbaijan has criticized its gas contract with Turkey, which sells gas to Ankara at a discount and Russia has made moves to buy additional gas from Azerbaijan for its South Stream Pipeline, seen as the main rival to the Nabucco. Among potential hurdles facing Turkey in its talks with Azerbaijan over gas, Turkey’s relations with Azerbaijan have been tense since Turkey and Armenia signed protocols earlier this month to normalize ties.
The Turkish border with Armenia had been closed since 1993 when Ankara shut it in solidarity with Baku, which was fighting a losing battle against Armenian separatists in Nagorno Karabakh.
