Peak Oil News - Iran claim clouds Turkey's energy goals

An Iranian official's declaration that his country has entered into negotiations with European firms about the supply of natural gas into the Nabucco pipeline intended to supply Europe via Turkey was rejected this week by one of the firms concerned.

Reuters quoted the managing director of the state National Iranian Gas Export Company as echoing last month's statement by former German chancellor Gerhard Schroeder (president of the North Stream project that seeks to take Russian gas under the Baltic Sea to Germany for distribution to the rest of the European Union) that the Nabucco project could not succeed without Iranian gas.

However, a spokesman for German energy company RWE reiterated in reply that "Iranian gas is not necessary" to the pipeline, adding that "Iran is not [even] a potential member of the consortium" and that political conditions remain "unfavorable" for cooperation with the country.

This most recent skirmish in the war of press releases came after Turkey signed an agreement to invest US$3.5 billion in the Iranian energy industry, including production of gas from Iran's South Pars field. The agreement would in principle allow the Turkish Petroleum Corporation (TPAO) to capture some of the gas produced for export to Europe.

Yet it is far from clear where the capital for investment will come from during the current worldwide economic crisis, which affects Turkey as well. Even governments in Europe are encountering difficulties in finding financial resources for their energy projects, and Ankara's own investment projects in southeastern Anatolia lack funding.

Meanwhile, a separate statement from the Turkish side mentioned that progress had been made in negotiations with Azerbaijan for the supply of gas from Azerbaijan to Turkey. Although this appears to refer to the ongoing dispute over price over the current contract, such progress, if it is real, holds implications for future Turkey-Azerbaijan cooperation over Nabucco.