DHAKA, Mar 1 Bangladesh will enter talks to buy 1.4 million tonnes (28,000 barrels a day)

DHAKA, Mar 1 (Reuters) Bangladesh will enter talks to buy 1.4 million tonnes (28,000 barrels a day) of crude a year from Iran on a deferred-payment basis, the first term oil contract between the two Muslim nations, oil officials said on Thursday.

Energy ministry officials said negotiations to finalise the terms of the scheme should start soon, without providing details. One official said Iran had made the offer last week.

''We are examining (Iran's) offer and if it is beneficial for the country, we may approve it,'' Tapan Chowdhury, the energy adviser of the interim government, told Reuters. But he said the two state oil firms must first discuss payment and pricing.

The potential new outlet for Iran, OPEC's second-largest crude producer, comes as the U.N. Security Council discusses new sanctions to press Tehran to halt its nuclear work. The United States has been pushing to further isolate Iran.

Bangladesh has been importing 700,000 tonnes a year from Kuwait and Saudi Arabia each to supply crude oil to its refineries, which have a capacity of about 30,000 bpd.

But the two Middle East OPEC producers have declined a BPC proposal to sell crude during the fiscal year to June 2007 on delayed-payment terms, one official said. The United Arab Emirates also sells crude to Bangladesh.

It was not immediately clear if BPC, the country's lone importer and distributor, which is facing a shortage of funds to pay for the oil, has decided to terminate its term deals with the other Middle Eastern producers.

BPC's accumulated losses at the end of 2006 totalled nearly $1.7 billion, a government document showed.

Earlier, Kuwait Petroleum Corp. (KPC) had turned down a request by the Bangladesh energy ministry to supply refined fuel on deferred-payment terms, Bangladeshi officials said.

Under its state-to-state deal, Bangladesh imports nearly 2.8 million tonnes of refined oil, including 1.6 million tonnes of diesel from Kuwait annually, against the total annual demand of about 3.8 million tonnes, energy officials said.

The imports are mostly diesel and kerosene, which account for 80 percent of Bangladesh's fuel consumption.

Energy officials said the total cost of Bangladesh's oil imports to the end of June 2006 grew 34.62 per cent to $2.1 billion from $1.56 billion in the previous fiscal year.

(US$1 = 69.00 taka) REUTERS CS DS1505