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Iranians-Swiss in Gas Deal, Despite U.S. Pressure

By The Media Line/Yaniv Berman

The National Iranian Gas Export Company (NIGEC) has signed a long-term agreement with the Swiss-based EGL Group to bring natural gas from Iran to Europe, beginning in 2009.

"The investment in exporting gas to Switzerland will reach 40bn Euros," NIGEC's managing director Na'srallah Seifi told the Iranian-based Fars news agency over the weekend.

Seifi revealed that once the agreement was implemented 5.5 billion cubic meters of gas would be sent to Switzerland, using pipelines in Turkey, Greece, Albania and Italy. He added that by next year Iran would be making preparations to increase its production of gas, while EGL would construct the Trans Adriatic Pipeline (TAP) from southern Greece, through Albania to south Italy.

Earlier this month, Royal Dutch Shell, which ranks as the second-largest non-governmental energy company in the world, decided to pull out of a planned gas deal in Iran. The deal was signed in 2002 for the development of a gas field in southern Iran.

"Since the late 1990s the United States has been putting pressure on oil and gas companies not to invest in Iran," Dr. Manouchehr Takin, a senior energy analyst with the Centre for Global Energy Studies in London, told The Media Line.

"The European Commission, on the other hand, has on several occasions in the last 10 years insisted that oil and gas companies in Europe... will not be bound by approvals or laws passed by the U.S. Congress," Takin added.

According to Takin, the U.S. pressure has been effective only to a certain extent. Takin gave the example of British Petroleum, which officially announced it would not invest in Iran until Iran's conflicts with the U.S. were solved.

"On the other hand, there have been many oil companies - Italian, Russian, Malaysian and others - that have put aside the U.S. pressures," Takin said, adding that in the case of Switzerland, the U.S. had officially criticized the Swiss policy, but had so far failed to thwart the deal.

According to EGL's website, the company's natural gas procurement contract with NIGEC will be for 25 years. The contracted gas quantities will allow EGL to cover its 50-percent share of transportation capacity of the Trans Adriatic Pipeline (TAP), which it will build together with Norway's StatoilHydro ASA.

The contract will also secure long-term supply for Italy and Switzerland, as well as help diversify gas supplies to Europe.

"Natural gas from Iran is necessary for the opening of a fourth gas transportation corridor to Europe," head of EGL's Gas Division, Joachim Conrad, said in March.