UPDATE 1-Iran: No Turkmen gas price talks till flows resume

Wed Jan 9, 2008 11:58am GMT

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TEHRAN Jan 9 (Reuters) - Iran will not discuss any increase in the price of gas supplied from Turkmenistan until flows to the Islamic Republic resume, Iran's oil minister was quoted by the ministry's Web site SHANA as saying on Wednesday.

Iranian officials said last week Turkmenistan had halted daily deliveries of up to 23 million cubic metres to Iran, blaming it on technical problems. But some Iranian media have suggested it might be linked to a pricing dispute.

"We have said that until the flow of gas from Turkmenistan resumes, we will not have any talks about a review on increasing the price of Turkmenistan's natural gas," Oil Minster Gholamhossein Nozari said.

The head of Iran's state gas company last week said Turkmenistan had cited emergency repairs as the reason for the cut in supplies. But he also said Turkmenistan wanted to increase the price of gas it sells to Iran.

In November, Turkmenistan reached an agreement to increase the price of gas it delivers to Russia's gas export monopoly Gazprom (GAZP.MM) by 30 percent.

Iran, a small gas importer despite its huge gas reserves, gets about 5 percent of its needs from Turkmenistan and the supply disruption caused shortages in some areas as well as a reduction in Iran's gas exports to Turkey last week.

Despite sitting on the world's second largest gas reserves after Russia, analysts say Iran has been slow to develop the sector due to sanctions, politics and construction delays.

(Reporting by Parisa Hafezi, writing by Edmund Blair and Fredrik Dahl)

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