Turkey to decide on Iran gas investment in two weeks

March 25, 2010, Thursday/ 18:01:00
Turkey will decide within two weeks on whether to go ahead with investment in Iran to produce natural gas, in a deal that would upset the US.

Energy Minister Taner Yıldız said late Tuesday the deal, with an estimated worth of $5.5 billion, had political support in Ankara.

The decision to press ahead now rested with firms carrying out feasibility studies in the South Pars gas field, Yıldız told Reuters in an interview. The United States is seeking to isolate Iran over its nuclear program, which the West fears includes covert ambitions for nuclear weapons. Washington is lobbying Turkey and other countries to support the threat of economic sanctions. “We will decide within two weeks on our final decision on the investment in Iran,” Yıldız said.

“This project has complete political support, but companies are carrying out the talks. … If the feasibility is not high, we will not continue,” he said. Turkey, a non-permanent member of the UN Security Council, is skeptical about the efficacy of sanctions and has expressed doubts that Iran is building nuclear weapons.

A partner in the European Union-backed Nabucco pipeline project, Turkey supports the idea of using Iranian gas as throughput for the proposed pipeline, which aims to reduce Europe’s dependence on Russian gas. A net energy importer, Turkey is trying to secure more gas for itself and maximize its potential as a hub for cross-border pipeline projects linking Europe to suppliers in the Middle East and Central Asia.

The energy alliances with Iran and Russia have been a factor fuelling doubts about whether Turkey, having seen its bid for EU membership falter, has begun drifting away from its traditional Western allies. Yıldız said Turkey planned to bid, along with Russian partner Gazprom and some US firms, in future tenders to develop Iraqi oilfields.

Turkey was part of a Gazprom-led group that won rights last year to develop Iraq’s Badrah oilfield. The minister also said Turkey planned to finalize the privatization of its natural gas grids this year. Ankara has been pushing to speed up the pace of its privatization program, which slowed in 2009 due to poor market conditions.

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