Iran Building First Gas Pipeline to Europe

Iran started to build a long-planned pipeline to export natural gas to Europe with an investment of at least 1.3 billion euros ($1.55 billion), state television reported today.

Iran plans to complete its section of the pipeline by 2013, the TV network said, without citing a source. The system will pass through Turkey and have a capacity of as much as 110 million cubic meters of gas a day, it said. The route of the pipeline is unclear.

An earlier, unrealized version of this project was to extend to Greece, Italy, Switzerland, Austria and Germany, according to details disclosed in September 2008. It was not immediately clear if the government intends the new project as an alternative to the planned Nabucco pipeline, a 7.9 billion- euro network for transporting gas from the Caspian Sea through Turkey to Europe. Iran already operates a pipeline to Turkey, its western neighbor.

Iran, home to the world’s second-largest gas reserves after Russia, has for years been under United Nations sanctions and U.S.-imposed restrictions on foreign investment. The sanctions aim to deter Iran from pursuing a nuclear weapons capability. These economic and financial constraints have made it difficult for Iran to fulfill its energy plans and have hampered foreign investment in the country.

Bloomberg