US officials ask Turkey to seek energy alternatives

ISTANBUL, Sep 22 (Reuters) United States officials fresh from a regional energy conference said today Turkish plans to produce natural gas in Iran should be replaced with projects with other regional suppliers Turkmenistan and Kazakhstan.

The meeting came two days after Prime Minister Tayyip Erdogan said Turkey would not cut its relationship with Iran, its second biggest gas supplier. Turkey plans to invest 3.5 billion dollars in Iran for gas production.

''There is no shortage of gas in the region. The question is developing it in a responsible way with states that are politically stable and responsible to the international community,'' US Undersecretary of Economic, Energy and Agricultural affairs Reuben Jeffery told a news conference.

He was speaking after attending a conference of around 20 states to discuss how West Asian, Caspian and Central Asian countries could diversify their energy export routes.

Washington has objected to an agreement between its NATO ally Turkey and the Islamic republic to jointly export gas to Europe.

The US Iran Sanctions Act of 1999 says that if any foreign company invests more than 20 million dollars in Iran's gas and oil sector they are subject to US sanctions.

When asked if Turkey would face penalties if it continued its investment plans in Iran, US ambassador to Turkey Ross Wilson told reporters that it was not the time to ''go into hypotheticals.'' Jeffery said both Turkmen and Kazakh gas had potential as alternatives to Iranian gas.

Neither country has the infrastructure to transport its gas to Turkey. Asked what the best export route was for the gas, Wilson responded: ''clearly a trans-Caspian pipeline.'' Plans to build a trans-Caspian pipeline have been halted because states surrounding the body of water have not come to an agreement over ownership rights of its rich gas resources.

REUTERS GT BD2108