TEHRAN (Reuters) - Iran is in talks with Italian power utility Edison EDN.MI about exporting gas to the European Union country, Iranian Oil Minister Gholamhossein Nozari said on Sunday.
Iran sits atop the world’s second largest gas reserves after Russia. But sanctions, politics and construction delays have slowed its gas development, and analysts say the country is unlikely to become a major exporter for a decade.
Soaring oil and gas prices have made energy supply an acute issue in Italy, which has scarce energy resources and depends on imports for about 80 percent of its energy needs.
“We have started negotiations ... and the talks have almost been finalized,” Nozari said in comments aired by state television.
“Their preliminary need for the end of 2008 is 1.5 bcf (billion cubic feet) and it will be increased to 4.5 bcf,” he said, without giving details.
Edison has said it aims to boost its natural gas supplies to more than 23 billion cubic meters (bcm) from the current level of 13 bcm thanks to its participation in major gas pipeline projects and a liquefied natural gas terminal project in Italy.
The United States, leading efforts to isolate Tehran over its disputed nuclear program, has urged international companies to avoid doing business with Iran, which is also the world’s fourth-largest crude exporter.
Italy is one of Iran’s largest trading partners and the head of Italian oil major Eni (ENI.MI) said last month it will not abandon its contracts in the Islamic state.
Iran says its nuclear work is peaceful and aimed at generating electricity so that it can export more oil and gas. Its large gas reserves make it a magnet for international energy firms, despite two rounds of U.N. sanctions since December.
Reporting by Reza Derakhshi, Writing by Fredrik Dahl; Editing by Richard Hubbard