Türkİye, Economy

Turkey takes Russian gas price dispute to arbitration

Energy minster said Turkey's call to settle natural gas price discount was ignored for months

Furkan Naci Top  | 27.10.2015 - Update : 28.10.2015
Turkey takes Russian gas price dispute to arbitration

Ankara

ANKARA

Turkish Energy Minister, Ali Riza Alaboyun, said Tuesday that the natural gas price dispute between Turkey and Russia was placed before the International Arbitration Court on Monday.

"We have demanded a discount from Russia, and the arbitration court will rule on it," Alaboyun said speaking at the launch of an electricity generation ship in Istanbul.

Russia's Gazprom announced a 6 percent discount on natural gas purchases by Turkey's state-owned pipeline company BOTAS  last December.  However Turkey, which is the second-largest importer of Russian gas after Germany, demanded a further discount on gas prices. 

Gazprom then raised the discount rate to 10.25 percent, but this was never agreed to.  

Since there was no action on the discount after December, Turkey made use of its right to take the case to the International Arbitration Court after June, based on a clause in the agreement with Gazprom.  

Alaboyun said Russia has ignored Turkey's calls for an additional discount since June, and so Turkey has had recourse to the arbitration court. 

The energy minister explained that Turkey had previously planned to take disputes with Gazprom to the International Arbitration Court, but these cases were settled outside of court before the hearings took place. 

"We will keep purchasing our gas as always until the court rules on the case," the minister added, forestalling speculation on possible natural gas supply reductions in the coming winter. 

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