On November 13 2001 the deputy managing director of National Iranian Oil Company announced that the fate of the project to export gas to Turkey would be determined in two months. His political boss had threatened legal action against Turkey days earlier.

On November 10 the Iranian press quoted Oil Minister Bijan Namdar Zanganeh as saying that Iran was considering legal action over Turkish gas imports. Despite long delays and Turkey's accession to a take-or-pay contract, this is the first time that Iran has threatened to sue Turkey over the matter.

Referring to Turkey's stance, Zanganeh noted that the Turks were insisting that all gas metering devices on the Bazargan border be re-checked, stating that they would begin receiving gas deliveries once they were convinced that all was in order. He added: "Turkey has invested more than $1 billion on its soil for the import of Iranian gas. The country will suffer heavy economic damage if it does not make use of the project."

Zanganeh said that Iran had invited all the companies involved in the construction of the gas pipeline to gather at the Bazargan border in the presence of Turkish experts to resolve the technical dispute.

On November 11, immediately following Zanganeh's remarks, the Turkish foreign minister announced that the gas imports would begin in less than two months, by the end of 2001. However, this is not the first time that a Turkish official has made such a statement.

Turkey has refused to start receiving gas imports on the grounds that a metering station on the Bazargan border was not prepared for operation. Iran has disputed the claim, saying that its gas export programme faced no fundamental technical or legal problems.

Analysts have repeatedly mentioned possible reasons for Turkey's delaying tactics, including US pressure, internal political pressures, financial problems and the abundance of other gas import deals it has signed.

For further information on this topic please contact Behrooz Akhlaghi at International Law Office Dr Behrooz Akhlaghi and Associates by telephone (+98 21 873 21 38) or by fax (+98 21 873 41 29) or by email ([email protected]).