US opposes Turkish-Iranian gas agreement

ISTANBUL, July 16 (Reuters) The United States opposes new Turkish plans to transport Turkmen gas via Iran and Turkey to Europe and for a Turkish state-owned firm to develop Iran's South Pars field, a State Department official said today.

''By government and by law we are opposed to investment in Iran or energy projects in the country,'' the official, who asked not to be named, told Reuters over the phone.

A senior Turkish energy official said on Saturday that Turkey had signed a preliminary agreement with Iran to pump 30 billion cubic metres of natural gas from Iran and Turkmenistan through Iran and on to Europe.

The agreement also included a plan for the Turkish Petroleum Corporation (TPAO) to develop Iran's South Pars gas field in three phases and extract 20 bcm of gas from there.

The Turkish official said the deal meant no further supplies were needed for the Nabucco project -- a 4.6 billion euro pipeline, supported by the EU, to bring central Asian gas to Europe. Turkey had sought Russian gas for the project.

The United States, a NATO ally of Turkey, has cut diplomatic relations with Iran, while the US Congress is considering legislation that would force President George W Bush to impose sanctions on European and other companies that invest more than 20 million dollars in Iran's oil and gas industry.

Details of the Turkish-Iranian deal would be announced in a month's time, the Turkish official had said.

Reuters KK GC1745