UPDATE 1-Iran denies report of gas distribution grid deal

(Recasts with official denial of the contract)

TEHRAN Jan 19 (Reuters) - An Iranian official has denied a report that a state engineering company had signed a deal with a German company to help improve Iran's gas distribution grid.

Earlier on Tuesday, the semi-official Mehr News Agency, citing the head of Iran's Gas Engineering and Development Company, said a German firm had agreed a 1 billion euro deal to manufacture, install and commission 100 gas-fuelled turbines and turbo-compressors.

"We have not signed any contracts with any German firm regarding the manufacturing of gas-fuelled turbines and turbo-compressors," a public relations director at Iran's National Gas Company told state broadcasters website.

Mehr had not reported the firm's name nor said when the contract was signed. (Editing by Will Waterman)