Turkey, Iran to sign major energy deal today

Energy and Natural Resources Minister Taner Yildiz, accompanying Prime Minister Recep Tayyip Erdogan on an official visit to Tehran, yesterday told reporters that Turkey and Iran would sign a framework agreement to jointly explore for natural gas in the South Pars basin, the world's largest gas field. "We'll start work in the first or second week of November. We'll come here with a delegation to do technical work," he said, adding that at least half of the natural gas to be explored, estimated to be around 35 billion cubic meters, would be marketed either in Turkey or via Turkey. Iran is Turkey's second-biggest supplier of natural gas, after Russia. Turkey has said Iranian gas could help the planned Nabucco pipeline supply Europe and lessen the continent's dependence on Russia. "I believe Nabucco (organizers) will sooner or later understand the importance of Iran's presence," Erdogan told Iranian President Ahmadinejad during their meeting, Iran's IRNA news agency reported. Yildiz said under the agreement, expected to be signed today, Turkey would have the right to market and trade the explored gas, and almost half of the natural gas would be sold either in Turkey or via Turkey. "We foresee striking almost 35 billion cubic meters of gas," he also said. Yildiz said the South Pars project might cost over $4 billion. The South Pars/North Dome field, located in the Persian Gulf, is the world's largest gas field, and is shared between Iran and Qatar. It covers an area of 9,700 square kilometers, including 3,700 square kilometers (South Pars) in Iranian territorial waters. Condensate production from South Pars is currently 200,000 bbl/d (32,000 m3/d), and by 2010, could increase to over 500,000 bbl/d (79,000 m3/d). Yildiz also said Turkey is holding talks with Azerbaijan on natural gas and hopes to reach an agreement soon.