April 23, 2007 / 7:10 PM / 12 years ago

U.S. to discuss OMV's Iran gas deal with Austria

WASHINGTON, April 23 (Reuters) - The United States voiced misgivings on Monday about an Austrian company’s deal to help develop Iran’s gas resources, saying the timing was poor given the West’s standoff with Tehran over its nuclear program.

Iran signed a major agreement with Austrian energy group OMV (OMVV.VI) on Saturday to help develop the country’s vast gas resources and build a plant for liquefied natural gas, or LNG, official Iranian media said.

The deal comes at a time of escalating tension between the West and Iran over Tehran’s disputed nuclear program. The United States, which accuses Iran of seeking to build atom bombs, has urged its allies not to invest in the country.

Iran has said its nuclear program is to generate electricity.

U.S. State Department spokesman Sean McCormack said the United States would raise questions about the OMV deal with the Austrian government and with the company, although he noted U.N. Security Council resolutions do not bar investing in Iran’s energy sector.

“Perhaps this is not the most appropriate time to be making or committing to making large investments in the Iranian oil and gas sector given where Iran is vis-a-vis the rest of the international community,” he told reporters.

The U.N. Security Council last year demanded Iran cease its uranium enrichment by Aug. 31, something Iran has so far refused to do.

As a result, the Council on Dec. 23 passed a resolution outlawing trade in sensitive nuclear materials and ballistic missiles, as well as freezing assets of some some individuals and institutions associated with Iran’s atomic programs.

On March 24, it voted 15-0 to impose new sanctions on Iran for its nuclear ambitions by banning Tehran’s arms exports and putting financial bans on individuals and institutions, including the state-owned bank and elite Revolutionary Guards.

There is some uncertainty about the scope of OMV’s deal.

Iranian state television described it as Iran’s biggest such contract with Europe, and some Iranian media put its total value at up to $30 billion over 25 years, including the sale of billions of cubic meters of natural gas to the continent.

But OMV made clear the deal was still at an early stage and did not give any figures, suggesting it had so far only signed a non-binding memorandum of understanding.

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