Turkey has take-or-pay contracts to buy up to 30 billion cubic meters of gas annually from Russia but has been buying less. Gazprom says it sold 18 bcm to Turkey last year.

This year, Turkish officials expect to take delivery of more than the 75 percent of the contracted amount to avoid take-or-pay penalties. One way to bring down that required amount is to cut contracts.

“There is a 6 bcm contract on the West pipeline that’s about to end. We will terminate the contract if we don’t see a sufficient price reduction,” Yildiz said.

He said Turkey was reevaluating contracts to make savings after seeing a 39 percent increase in natural gas prices in the past 29 months.

It has pressed Russia for discounts, but the two sides failed to reach an agreement in March when the subject came up during talks in Moscow between Prime Minister Tayyip Erdogan and Russian President Dmitry Medvedev.

The export arm of Russian gas producer Gazprom said on Thursday it was in talks with Botas, Turkish pipeline operator and gas importer, on supply contracts and that the Turkish Energy Ministry was not involved in negotiations.

“Gazprom Export has not received any information from its Turkish partner, Botas, on its position over prolonging the contract,” Gazprom said in e-mailed comments.

A number of Russia’s customers have been vying for price cuts from the world’s biggest oil and gas exporter. Russia’s failure to come to an agreement with Ukraine over gas prices has led to fresh worries of a new gas war, similar to the kind that cut off supplies to Europe in the past.

If Botas does cancel the 6 bcm West pipeline contract, Turkish private sector firms are expected to sign deals for smaller amounts, taking the burden off the Turkish state sector.

In a separate development, two sources at Iraq’s North Oil Company said Iraq shut down crude exports to Turkey through the Kirkuk-Ceyhan pipeline on Wednesday due to a leak,

“There was a leak from the pipeline ... because the pipe was old. The North Oil Company has decided to stop pumping oil to the export pipeline,” said a senior NOC official who asked not to be named.

Iraq exported 461,000 barrels per day of crude from its northern fields in August, most of it through the Kirkuk pipeline to the Mediterranean port of Ceyhan.

The bulk of Iraq’s total exports of 2.189 million bpd in August moved through the southern export terminals at Basra.

An NOC production engineer confirmed the Kirkuk-Ceyhan shutdown and said it was not immediately clear when exports would resume.

“Exports from Kirkuk were halted due to a leakage resulting from a crack in the export pipeline passing through (the town of) Shirqat this morning,” the engineer said.

“NOC workers are working to fix the damaged section and it’s difficult to give an accurate time when exports could be resumed.”

Shirqat is near the border of Nineveh and Salahuddin provinces about 300 km north of Baghdad.

Production at the northern fields has not been stopped and crude was being pumped into storage tanks in Kirkuk and elsewhere, the senior NOC official said.