Iran Plans Gas Link to Europe Distinct from Nabucco

A05083053.jpgTEHRAN (FNA)- Iran plans to build a Persian Pipeline for shipping its natural gas to Europe that would be independent of the EU-backed Nabucco project, a senior Iranian official said on Monday.

Iran, which has the world’s second-largest gas reserves after Russia, had previously suggested it could hook up to the planned Nabucco pipeline that is meant to bring Central Asian gas to Europe, bypassing Russia and reducing EU dependence on Moscow for energy.

“We have nothing to do with the Nabucco pipeline and since the European Union announced … it does not need Iran’s gas we have designed a new plan independent of Nabucco,” Akbar Torkan, head of Oil Ministry planning, told the ministry’s website Shana.

The Nabucco pipeline is due to bring 30 billion cubic meters of Caspian and Middle Eastern gas a year from Turkey to an Austrian gas hub via Bulgaria, Romania and Hungary.

EU support for the scheme has gained urgency since Russia’s invasion of Georgia in August stoked tensions with the West.

Torkan said a number of European countries — Turkey, Switzerland, Austria, Germany, Italy and Greece — were interested in buying gas from Iran.

“In an effort to respond to the needs of these (countries) the Persian gas pipeline will be constructed from Iran to Europe,” Torkan said.

“There will be no competition with the Nabucco pipeline and the path of the Persian Pipeline … is separate from the Nabucco pipeline,” he said, without giving details on when it would be constructed and how much it would cost.

Nabucco’s shareholders are Austria’s OMV, Hungary’s MOL, Romania’s Transgaz, Bulgaria’s Bulgargaz, Turkey’s Botas and Germany’s RWE. The pipeline is expected to cost around $12 billion.

But there has been uncertainty that it can secure enough gas supplies from nations that were once part of the Soviet Union and are subject to intense lobbying by Russia’s Gazprom, whose planned South Stream pipeline will rival Nabucco.

MOLs chief executive last month said Nabucco would become a reality if Iran comes on board as a supplier.

The Nabucco consortium aims to ship gas through the first section of the link from 2013 and says it has already had indications of interest for more than twice the volume of gas the pipeline can carry.

Some European countries have recently voiced interest in investment in Iran’s energy sector after a gas deal was signed between Iran and Switzerland regardless of US sanctions.

The National Iranian Gas Export Company and Switzerland’s Elektrizitaetsgesellschaft Laufenburg signed a 25-year deal in March for the delivery of 5.5 billion cubic meters of gas per year.

The biggest recent deal, worth €100m ($147m, £80m), was signed by Steiner Prematechnik Gastec, the German engineering company, this month to build equipment for three gas conversion plants in Iran. This is at a time when France’s Total, Royal/Dutch Shell and Norway’s Statoil have put on hold their shares in multi-billion dollar contracts.

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