Iran holds talks on gas supply routes to Europe

Iran is holding talks on several alternative routes to transport its natural gas to Europe, an energy official was quoted as saying yesterday.

Iran sits atop the world's second-largest gas reserves, after Russia, but it has been slow to develop exports, partly because of the US sanctions that hinder access to technology.

Reza Kasaiezadeh, head of National Iranian Gas Export Company (NIGEC), said possible routes to Europe included via Azerbaijan as well as through Iraq and Syria or via Saudi Arabia to Italy, the semi-official Mehr News Agency reported.

"Talks are currently under way on each of the alternatives," he said, adding transit price would be crucial in determining the choice.

"In some instances… the income resulting from the transit exceeds the gas sale price for the producing countries," he said, without giving details on which parties Iran was holding discussions with. He also said Switzerland had started talks with Ankara about the transit of Iranian gas through Turkey, giving no details.

Swiss energy group EGL signed a 25-year gas purchase deal worth more than $13 billion (Dh47.7bn) with Iran last year.

Iran is Turkey's second-biggest supplier of natural gas after Russia. Turkey has said that Iranian fuel can help the planned Nabucco gas pipeline to supply Europe with gas and lessen the continent's dependence on Russian supplies.

In a separate Mehr report yesterday, another official confirmed that Iran had given state oil company Turkish Petroleum a one-month deadline to finalise a $3.5bn deal to develop part of the world's largest gas field in Iran.

"At the request of the Turkish Energy Ministry, the National Iranian Oil Company has renewed the one-month deadline for Turkey to make its final decision on three South Pars gas field phases," said Ali Vakili, head of the Pars Oil and Gas Company.

Pars Oil and Gas Company is a subsidiary of NIOC.

Vakili said that if Turkey did not sign the contract Iran would negotiate with other domestic and foreign firms.

The Turkish and Iranian governments agreed in 2007 that Turkish Petroleum would produce an annual 20.4 billion cubic metres of natural gas from three development phases of Iran's South Pars field.

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