Turkmenistan halted gas supplies to Iran Sunday amid tensions between the two countries over arrears, the Iranian National Gas Company was quoted by oil ministry news agency Shana as saying.

"The gas company of Turkmenistan has cut gas exports to Iran, contrary to the agreement reached, by demanding immediate payment of arrears," Shana cited an official statement as saying.

The two countries have been holding discussions but have not yet reached agreement on the payment and amount of arrears Iran owes to Turkmenistan.

The Islamic republic uses Turkmen gas in the populated north of the country while its main gas fields are in southern Iran.

The National Iranian Gas Company asked consumers to "pay attention to consumption", but added that with domestic production rising, the country did not need to import gas and could cope by making savings.

Turkmenistan currently exports up to 10 billion cubic meters of gas to Iran, its third largest trading partner after China and Turkey.

Ten years ago, Turkmenistan abruptly stopped its gas exports to Iran in the middle of winter, and demanded a ninefold increase in the price.

According to an oil ministry official, Iran currently produces 700 million cubic meters of gas daily, and imports from Turkmenistan represents only 1.5 percent of domestic consumption.

Turkmenistan's total gas reserves are estimated to be the fourth largest in the world behind Qatar, Russia and Iran.