October 31, 2009 / 6:55 AM / 10 years ago

Iran says in talks on Nabucco participation-report

TEHRAN (Reuters) - A senior Iranian energy official said Tehran was holding “unofficial” talks with some European firms about its participation in the 7.9 billion euro Nabucco gas pipeline project, a news agency reported on Saturday.

Iran sits on the world’s second-largest natural gas reserves after Russia but has been slow to develop exports, partly because of U.S. sanctions hindering access to needed technology.

Turkey has said Iranian gas can help the planned Nabucco pipeline, which is backed by the European Union, to supply Europe and lessen the continent’s dependence on Russian deliveries.

“Definitely, the Nabucco pipeline will not become operational in the absence of Iran,” said Reza Kasaeizadeh, managing director of the state National Iranian Gas Export Company.

“Unofficial negotiations between some European companies and Iran on the pipeline have begun,” the semi-official Mehr News Agency quoted him as saying. He did not name any of the countries.

Any such discussions may cause concern in Washington, which is embroiled in a long-running row with Tehran over the Islamic Republic’s disputed nuclear program.

Nabucco’s current shareholders include Austria’s OMV (OMVV.VI), Hungary’s MOL (MOLB.BU), Romania’s Transgaz TGNM.BX, Bulgaria’s Bulgargaz, Turkey’s Botas and Germany’s

RWE (RWEG.DE).

Ankara signed a preliminary deal in 2008 for Iranian gas to be exported to Europe through Turkey and for Turkey to produce gas in Iran’s South Pars field in the Gulf. The investment would amount to $3.5 billion.

The deal has been delayed by objections from the United States, which opposes new energy deals in Iran as part of Western efforts to isolate Tehran over the nuclear dispute.

Iran is under U.S. and U.N. sanctions over nuclear work Tehran says is for peaceful power generation but which the West suspects is aimed at making bombs.

Kasaeizadeh said Nabucco contracts signed so far were between consuming and transiting countries and that no deals had yet been finalized with gas producers, such as Iran, Azerbaijan or Turkmenistan.

Earlier this month, Turkish Energy Minister Taner Yildiz said Ankara was nearing a deal with Baku on gas transit through Turkey to Europe, saying there had been much progress since Azerbaijan said it might explore alternative routes.

Reporting by Hossein Jaseb and Hashem Kalantari; Writing by Fredrik Dahl; Editing by Nick Macfie

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