July 27 (UPI) -- The Iranian government said it scored a win in the energy sector, this time by developing a pipeline that will offset supply disruptions from its neighbors.
Disputes over payment issues in January prompted Turkmenistan to stop sending gas to its southern neighbor, Iran. A report in SHANA, the Iranian energy ministry's official news site, said construction of a natural pipeline to feed the northern mountainous provinces begins next week.
"The much-awaited gas pipeline is going to guarantee the steady supply of natural gas to the regions that experienced harsh winters in the past when neighboring Turkmenistan cut off gas supplies to Iran," the report read.
The terrain in northern Iran makes it difficult to distribute natural gas and other power supplies. Azerbaijan sells natural gas to the northern provinces of Iran in exchange for electricity.
"By launching the natural gas project, Iran will no longer be in need of importing gas from Turkmenistan and, if Ashgabat decides to sever gas supply to Iran, the latter will be faced with no trouble to supply gas to its northern provinces," Hamid Reza, a managing director of National Iranian Gas Co., told SHANA.
Iran's north is isolated from the gas-rich south.
In January, the Iranian Oil Ministry published a list of 29 foreign oil and gas companies that are qualified to take part in any upcoming tenders for exploration and production. The NIOC, a target of U.S. sanctions, said the list represented a "big step" in opening Iranian oil and natural gas fields up to Western investors.
Apart from oil, Iran is one of the largest natural gas producers in the world and said that role could help address energy security needs for a European market wary of Russia's control over gas supply and transit arteries.
The country accounts for about 5 percent of the world total natural gas production and more than 80 percent of its gas reserves are in basins not yet in the development stage.