Iran, which must pay Turkey $1.9 billion in compensation for overpricing its gas exports to the Eurasian country between 2011 and 2015, will offer discount on future gas supplies to clear the amount, Turkey's energy minister said.
"In the coming years, Turkey will ensure its gas supplies at feasible costs," Berat Albayrak was quoted as saying by Anadolu News Agency, Eqtesad Online reported.
Iran signed a contract in 1996 to export up to 10 billion cubic meters of gas per year to Turkey over 25 years. But Turkey's state-owned oil and gas company Botas appealed in March 2012 to the International Court of Arbitration saying that Tehran had overcharged.
The court ruled in November that Iran supplied gas to Turkey at a higher price compared to other producers in the region and must cut its exported gas price by approximately 13%.
Albayrak did not specify whether part of the compensation will be paid in cash or how long it could take before Turkey will be remunerated.
"Iran's case is an important success for Turkey, and we will follow other arbitration processes closely," the minister said, adding that Iran-Turkey arbitration settlement has set a precedent for other cases such as a similar gas price dispute with Russia.
Botas filed a case for international arbitration in 2015 seeking a price discount for gas imports from Russian gas giant Gazprom. Russia supplies more than half of Turkish gas imports.
Iran, which started selling gas to Turkey in 2001, is the second largest gas supplier to the country, delivering 10 billion cubic meters annually.
Earlier in the week, Hamidreza Araqi, the chief executive of National Iranian Gas Company, said the compensation will be paid in an unknown number of installments.
Government officials had previously placed the amount of compensation at around $1 billion.
Turkey had also filed a separate suit accusing Iran of insufficient gas supplies, but lost that case.
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