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Iran energy deal angers United States

Gas from central Asia will play a greater role as supplies in northern Europe dwindle Keystone

The United States has criticised an agreement for the delivery of natural gas signed on Monday between a private Swiss energy company and Tehran.

This content was published on March 17, 2008 - 21:28

The deal was signed in the Iranian capital in the presence of the Swiss foreign minister, Micheline Calmy-Rey.

The natural gas from Iran together with supplies from Azerbaijan is expected to feed into a gas pipeline running from Greece via Albania to Italy, according to officials.

The deal with National Iranian Gas Export Company (NIGEC) and EGL covers the delivery of 5.5 billion cubic metres of gas per year to Europe through a pipeline by 2012. The contract runs over 25 years, according to EGL, which refused to reveal the worth of the contract.

Calmy-Rey said it was Switzerland's strategy to diversify its source of energy supplies. "We decrease our dependence, and the dependence of Europe, on Russian gas," she said.

Switzerland currently buys its supplies in northern Europe (Norway, Netherlands, Germany), Algeria (through France) and Russia. Consumption of gas represents about 12 per cent of Switzerland's energy needs.

The US embassy in Bern issued a statement late on Monday criticising the deal, saying it "sends the wrong message to Iran at a moment when Iran continues to defy United Nations Security Council resolutions" on the country's nuclear programme.

Violation

The US embassy added that the accord "violated the spirit of the sanctions".

But the Swiss government said it had informed Washington in advance of the signing of the contract and of the strategic importance of the deliveries.

And Calmy-Rey repeated on Monday that the natural gas accord breached neither UN nor US sanctions, which forbid any investment in Iran's oil and gas sector worth more than $20 million.

A representative of EGL told the Swiss news agency that the Swiss company was not investing any money in Iran but had only signed a contract to purchase gas.

Companies contravening the sanctions face being blacklisted and blocked from any dealings with US firms.

Good offices

Switzerland uses its good offices to represent US interests in Iran and Iranian interests in Washington. The US and Iran broke off diplomatic relations in 1980.

Bern imposed sanctions against Iran last year over its failure to halt uranium enrichment, in line with a UN Security Council resolution.

During her visit, Calmy-Rey called on Tehran to cooperate with the International Atomic Energy Agency to resolve the long-standing dispute.

She also addressed human rights issues, criticising the increasing use of the death penalty and corporal punishment in Iran.

Calmy-Rey added that it was unacceptable for the Iranian leadership to deny the right to exist of Israel - a member of the United Nations.

swissinfo with agencies

In brief

Persia - as Iran was then known - opened an embassy in Bern in 1917.

In 1919 Switzerland opened a consulate general in Tehran.

In 2005 there were 187 Swiss citizens living in Iran.

At the end of 2004, 3,801 Iranians were living in Switzerland.

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Gas industry

Natural gas is imported to Switzerland by four regional companies under the umbrella of Swissgas.

About 100 mainly public companies supply the gas to households and the industry through a 16,000km network.

About 1,700 people work for the Swiss gas industry which has an annual turnover of SFr1.7 billion.

The use of natural gas in Switzerland represents about 12% of the nationwide energy consumption.

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