Turkey Says Will Not End Gas Links with Iran

ANKARA (Reuters)–Turkey cannot end its natural gas cooperation with Iran, Prime Minister Tayyip Erdogan said on Thursday after a senior U.S. official urged Ankara to sacrifice its business ties with Tehran.
"Turkey is generating 52 percent of its electricity from natural gas and it is out of the question for us to say we are cutting our relations with these countries (chief suppliers Iran and Russia)," Erdogan told the news conference.
"No country can make such a demand of us. And the United States did not make such a demand," said Erdogan before flying to the United States for the annual gathering of the U.N. General Assembly.
Washington is concerned by NATO ally Turkey’s recent announcement that it planned to boost energy cooperation with Iran and invest $3.5 billion in its South Pars gas field starting next year.
Neighboring Iran–with the world’s biggest gas reserves after Russia–is already Turkey’s second largest supplier of natural gas after Russia. It provides gas through a pipeline between the two countries.
Turkey, experiencing fast economic growth, is almost entirely dependent on imports for its energy. But it is trying to diversify energy supplies and become a regional hub.
U.S. Undersecretary of State Nicholas Burns called on Turkey and other countries during a visit to Ankara on Wednesday to "sacrifice" their business ties with Iran to help prevent Tehran from possibly obtaining nuclear weapons.
"We do not think it makes sense to announce long-term oil and gas deals at a time when Iran is going ahead with nuclear weapons research," Burns told reporters.
"It is not as if Iran is the only country which produces energy. It’s not, and the issue of Iran becoming possibly a nuclear weapons power is so important that each country has to make sacrifices," he said.
Pressure is increasing on European countries and companies to reduce business ties with Iran. Turkey is one of the few countries in Europe increasing its energy cooperation with Iran.
European officials say new EU investment in the Islamic republic is already dwindling because of the political risk and lack of finance for major projects, while exports to Iran are falling as governmen’s and banks cut back trade credits.
The U.S. Iran Sanctions Act of 1999 says that if any foreign company invests more than $20 million in Iran’s gas and oil sector they are subject to U.S. sanctions, Burns said. He said Congress was currently studying plans to tighten the law.
Iran has defied diplomatic pressure led by the U.S. and its European allies to halt uranium enrichment. Major powers are due to meet in Washington on Friday to discuss a third U.N. Security Council resolution to toughen sanctions on Tehran.

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