Published on Business Times online, by Carl Mortished, March 24, 2008.
A multibillion-euro Swiss contract to buy natural gas from Iran has provoked threats from Washington, protests from Jewish groups and fuelled mounting concern about Europe’s energy security.
The deal between the Zurich utility Elektrizit’ts-Gesellschaft Laufenburg (EGL) and National Iranian Gas Export Company (NIGEC) would bring gas from Iran to Europe as early as next year, the Swiss company said.
The contract, worth between $10 billion ($7.8 billion) and $20 billion, was signed last week in Tehran in the presence of Micheline Calmy-Rey, the Swiss Foreign Minister, and President Ahmadinejad.
However, the deal to supply 5.5 billion cubic metres of gas per year for up to 25 years was condemned by the US State Department, which said that it would investigate the deal’s compliance with the Iran Sanctions Act …
… Sources within the Swiss Foreign Ministry also pointed to America’s continuing critique of Europe’s dependence on Russian gas. After this deal, we will be well diversified, with a third from the North Sea, a third from Russia and a third from Iran, a source said.
EGL said the an initial delivery of Iranian gas was expected in 2009.
The Swiss Foreign Ministry said that it had anticipated the US State Department’s reaction in regard to the Iran Sanctions Act. We don’t accept the extraterritorial application of American law . . . this is a contract to supply gas. It implies no investment in Iran, the ministry said. (full text).