Swiss company to bring gas from Iran

TIRANA, June.5 – The Swiss giant energy group EGL says it has completed a 25-year deal with Iran to deliver 5.5 billion cubic meters of gas per year to Europe. Head of EGL’s gas business, Joachim Conrad said that the deal plans for Iranian gas to flow through Turkey, Greece and Albania. In fact EGL has been the winner of many tenders from the KESH in order to provide import electricity to the country.
In order to reach Italy, a new pipeline under the Adriatic Sea would be built, he said. Conrad declined to disclose the value of the gas deal but said it was above 10 billion euros and below 22 billion euros, depending on a number of factors, including the price of energy. “With this move, we create a fourth way to deliver gas to Western Europe,” he said. Up to now, most European gas has been piped in via Russia, the North Sea or from North Africa. The new Trans Adriatic Pipeline, now in the planning phase, should be completed in 2010, he said. EGL is now in final negotiations with possible pipeline partners and aims to disclose their names over the summer.
The new pipeline, in which EGL expects to invest up to 150 million euros in equity, will join existing pipes that run from Iran through Turkey to new lines running from Greece via Albania to Italy. The accord with Iran was signed several months ago but made public only Monday at EGL’s half-year earnings news conference. Any sort of deal struck with Iran is likely to come under scrutiny by Washington, given the West’s standoff with Tehran over its nuclear program. Austrian group OMV came under fire from Washington after it signed a preliminary gas accord with Iran in April. Conrad, however, said the diplomatic row was a matter of priorities. “Long-term security of supply is more important than short-term political implications,” Conrad said.
EGL is 87 percent owned by Axpo Holding AG, a non-listed energy group with 9.4 billion francs in annual sales that is in turn owned by a consortium of Swiss cantons (states).Natural gas is the second largest source of energy in the EU after oil and covers one-fourth of the EU’s energy needs. Around 515 billion cubic meters of gas were consumed in the EU in 2005. Iran sits over the second-largest reserves of natural gas worldwide after Russia.