TEHRAN (Dow Jones)--Iran will begin to use a "floating" price formula for its purchases of natural gas from Turkmenistan starting next year, the oil ministry's official Shana Web site reported Monday, citing the managing director of the National Iranian Gas Co.
"Iran currently buys Turkmenistan gas at a fixed price, but will switch to a floating price formula from the start of next year that will be linked to the price of various oil products, mainly gas oil and fuel oil," Shana quoted Seyyed Reza Kasaeizadeh as saying, citing Petroleum Intelligence Weekly.
Iran plans to raise gas imports from Turkmenistan to help meet the country's rising domestic demand and make sure it meets its export commitments to Turkey, Kasaeizadeh said, reported Shana.
The NIGC managing director added that Iran is currently importing 9.2 billion cubic meters per year of Turkmen gas by means of a small pipeline running from Turkmenistan"s Korpedzhe natural gas field to northern Iran, according to Shana.
Kasaeizadeh said that provided Turkmenistan has sufficient gas at its disposal, Iran hopes to increase imports to the maximum 14 billion meters per year allowed under a long-term contract between the two countries, Shana reported.