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BAKU: Iran Fines Armenia For Violations Of Take-Or-Pay Gas Agreement

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  • BAKU: Iran Fines Armenia For Violations Of Take-Or-Pay Gas Agreement

    IRAN FINES ARMENIA FOR VIOLATIONS OF TAKE-OR-PAY GAS AGREEMENT

    APA
    Nov 6 2009
    Azerbaijan

    Baku - APA-ECONOMICS. Iran is delivering 1 to 1.2 million cubic meters
    of natural gas to Armenia a day in exchange for an equivalent amount
    of electricity under a contractual agreement, said Rasoul Salmani,
    engineering and technical services director of Iran's National Gas
    Export Company (NIGEC).

    In his words, the Iranian side is technically ready to increase the
    daily volume to 3 million cubic meters a day but can't do this because
    of Armenia's dragging feets.

    "Because this is a take or pay agreement, the Armenian side should pay
    Iran a fine. This is due to the fact that despite Iran's willingness
    to supply more gas in accordance with the agreement, Armenia takes
    lessen than the planned gas volumes," he added.

    A take or pay principle is a contractual agreement in which one party
    agrees to purchase a specific amount of gas or to pay the equivalent
    cost even if the specified amount of gas is not needed.

    The amount of penalty will be fixed and Armenia will be informed of
    this, he noted.
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