Iran's Oil Ministry plans to set up a $1.3 billion Turkey pipeline deal

Tehran: Iran's Oil Ministry said the country had signed a one billion euro ($1.3 billion) pipeline deal to take gas to Turkey and Turkish firm Som Petrol said it was the partner in the project.

The one-billion-euro deal to build 660km gas pipeline was signed yesterday during the Iranian oil minister's trip to Turkey.

A senior Iranian official said Iran would pay a transit fee to export its gas to Europe using the pipeline crossing Turkey.

The pipeline will enable Iran to export 50 to 60 million metres of gas per day. It will be constructed within three years, Javad Oji, head of the National Iranian Gas Export Company (NIGC).

Oji was quoted by the Mehr news agency as saying that 23 per cent of the project would be handled by the Iranian side and 77 per cent by the Turkish side.

One of the world's biggest oil and gas producers, Iran has been hit by US and UN sanctions that have hindered access to foreign investment and slowed its development as a major exporter.

The website identified NIGC's Turkish partner as ASB, but Som Petrol said it had signed the deal.

Iran and Turkey first agreed on a pipeline project in 2008 with the aim of carrying Iranian gas to Europe.

Ayan said the pipeline would carry 110 million cubic metres of gas per day and is planned to be completed in 2014.

The project is estimated to cost as much as 25 billion euros, he added.

Som Petrol already has operations in Turkmenistan and has been looking to expand business with Iran.

A unit of Som Petrol had applied to the energy regulator EPDK for permission to purchase electricity from Iran, according to officials from the regulator.

Turkey's Energy Minister Taner Yildiz said neither the Turkish government nor state pipeline concern Botas were involved in the deal with Iran, though several private firms had shown interest.

Yildiz added that Turkey's talks concerning Iran's giant South Pars gas project had failed to reach agreement over the marketing of the Iranian gas.

European Union foreign ministers will adopt tighter sanctions against Iran next week, including measures to block oil and gas investment and curtail its refining and natural gas capability, EU diplomats said