Turkey delaying Iranian pipeline repair for leverage with Tehran, U.S.

Turkey is delaying repair work on a natural gas pipeline with Iran to leverage a lower price and curry political favour with the United States, S&P Global Platts reported, citing industry sources.

The pipeline was blown up at the end of March, allegedly by Kurdish militants, and flows of natural gas were halted on March 31. Turkey is yet to provide an official explanation for the stoppage or details of when pumping would resume.

Repairs following such attacks usually take between three days and one week, but Ankara only began the work in mid-April and told the Iranian government that it would take several weeks, said Mehdi Jamshididana, a senior official at the National Iranian Gas Company (NIGC), according to S&P Global Platts.

Meanwhile, Turkey has upped its imports of U.S. liquefied natural gas (LNG), increasing its purchases to 23 cargoes this year from 13 in the whole of 2019 and four in 2018, S&P Global said.

S&P Global said Turkish state pipeline company Botaş deferred questions about the pipeline to the Energy Ministry, which has subsequently failed to respond to questions.

One private sector official said Turkey was using the repair delays to reduce the price of natural gas that Iran sells to Turkey. Turkey imported 17 percent of its natural gas needs from Iran last year, amounting to 2.7 billion cubic metres, S&P Global said.

Turkish Deputy Energy Minister Alparslan Bayraktar said in February that Turkey planned to use cheaper LNG to persuade its long-term natural gas suppliers to lower their prices.

Meanwhile, Turkey has called on the United States to strengthen relations, frayed by a series of diplomatic disputes. They include differences over Ankara’s purchase of S-400 air defence missiles from Russia and an attack by Turkey on Kurdish militants in Syria, who had provided firepower in the battle against Islamic State.

Turkish President Recep Tayyip Erdoğan spoke with U.S. President Donald Trump by telephone last week, the latest in several discussions between the two leaders this year.

Increased Turkish imports of U.S. LNG, along with the closure of the Iranian pipeline, could only serve to support Turkey’s pledge to “continue to be a powerful and reliable partner”, S&P Global said.

https://www.spglobal.com/platts/en/market-insights/latest-news/oil/052220-feature-turkey-eyes-leverage-as-it-drags-feet-on-iran-gas-pipeline-repairs