EU-Backed Gas Pipeline Needs Iranian Fuel, Minister Nozari Says

By Ladane Nasseri

Oct. 4 (Bloomberg) -- Iran's gas is an unavoidable source for the Nabucco pipeline project, that will supply fuel from the Caspian Sea region to Europe, Oil Minister Gholamhossein Nozari said.

``The Nabucco project can't be carried out without Iran,'' he told reporters at a gas conference in Tehran today. ``Europe will eventually need to turn to Iran.''

The 3,300-kilometer (2,050-mile) pipeline aims to bring gas from the Caspian via Turkey and the Balkans to Western Europe by 2013. The 7.9 billion-euro ($10.9 billion) link is backed by the European Union to reduce energy dependence from Russia.


Such a project needs years to become cost-efficient and Iran is the only country with reserves to supply Europe over an extended period, Nozari said. Iran has the world's second- largest gas reserves.

OMV AG, Austria's biggest energy company, is holding talks with Iran while ``studying the possibility of shipping gas'' from the country to Europe, the company said last month. The Nabucco group includes OMV, Budapest-based Mol Nyrt., Germany's RWE AG, Bulgaria's Bulgargaz EAD, Romania's Transgaz SA and Ankara-based Botas.

Iran also said last month it's seeking to build a $4 billion natural-gas pipeline to the EU that may rival Nabucco. The country is considering the two pipelines as a means for gas exports to Europe, Nozari said today, adding that the so-called Pars Pipeline was given ``priority.''

Iran is targeting a share of the global gas market of between 8 percent and 10 percent, Nozari said, without specifying a date. Iran currently has less than 1 percent of the global gas market.

To contact the reporter on this story: Ladane Nasseri in Tehran at lnasseri@bloomberg.net.