Turkey to discuss discount for Russian gas

"We do not want to announce a certain price yet, we will discuss this issue with Medvedev," says Yildiz.

ANKARA - Turkey's gas contract with Russia gives it the right to demand discounts, said energy minister Taner Yildiz in Ankara on Monday. 

Yildiz meets Deputy Chairman of Gazprom Alexander Medvedev Monday to discuss the repercussions of the Ukraine crisis on Turkey, mutual investment opportunities, storage of natural gas and the South Stream gas projects in particular.

"We do not want to announce a certain price yet, we will discuss this issue with Medvedev," said Yildiz adding “We wish for natural gas prices to be set according to international price levels applied to some EU countries.”

Yildiz stated that Russia and Turkey have agreed in principle to increase the capacity of the Blue Stream pipeline between Turkey and Russia via the Black Sea from 16 to 19 billion cubic meters with some minor upgrades. 

Yildiz said that, regarding Iraqi oil, "We have to transfer Iraqi oil to international markets if the capacity is full in Ceyhan - currently the maximum storage capacity is 2.5 million barrels and 1.5 million barrels of oil has already been transferred by the pipelines”.

- Turkey imports electricity from Iran

"Our hydro power capacity is low due to lack of rain, so we import electricity from Iran," said Yildiz adding that Turkey occasionally imports and exports electricity to neighboring countries such as Iran, Georgia and Bulgaria depending on electricity production levels.

Turkey heavily relies on foreign energy resources, such as natural gas and oil, which drives almost half of all the electricity production in Turkey and costs up to US$60 billion a year.

The West Stream pipeline currently supplies 12.5 percent of Turkey's natural gas from Russia through Ukraine, and the Blue Stream pipeline transfers 16 billion cubic meters of natural gas from Russia to Turkey via the Black Sea.

Turkey applied for arbitration on the cost of natural gas sales as Ankara considers the price of Iranian gas to be unfairly high.  As of 2013, Turkey pays Azerbaijan $349 for every cubic meter of gas and $429 to Russia for the same amount. Iran sells gas to Turkey for $507 per cubic meter. Turkey imports 10 billion cubic meters of Iranian gas per year, its second largest supplier after Russia.

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