May 10, 2011 | Quote

Iran to Sign Gas Deal with Syria, Iraq -Mehr

TEHRAN May 10 (Reuters) – Iran will soon sign a contract with political allies Syria and Iraq to export its natural gas to the Mediterranean region, a senior energy official was quoted as saying by the semi-official Mehr news agency on Tuesday.

Iranian and Syrian oil ministers said in January their countries planned to build a gas pipeline with the cooperation of Iraq to widen export options for regional energy players but that the pipeline was still at the idea stage.

“A trilateral agreement between the three countries on the transit of gas has been reached … The first official contract is ready to be signed soon,” Javad Oji, head of the National Iranian Gas Co. (NIGC), was quoted as saying.

“We plan to transit gas from the South Pars field through Iraq, Syrian and then Lebanon to the Mediterranean area and Europe,” Oji added.

Oji said up to $6 billion was needed to build the 56-inch pipeline and that it would have the capacity to transfer 110 million cubic metres of gas per day.

The South Pars gas field, shared with Qatar, makes up the world’s largest pure gas reserve. An official said last month Iran’s gas output would rise to 700 million cubic metres per day by March 2012.

While Iran holds the world’s second-largest gas reserves, it currently has no major net exports, partly due to international sanctions.

Western firms with the expertise and technology have become increasingly wary of investing in Iran due to a long-running international dispute over Tehran’s nuclear programme, which the United States and its allies suspect is aimed at making bombs. Tehran denies this.