Iran & Switzerland: Taking US Govn't Leap In A Gas Deal

The Iranian Minister of Foreign Affairs Manouchehr Mottaki with his Swiss counterpart Micheline Calmy-Rey declared at a joint news conference, that Iran and Switzerland have signed a major contract for Iranian gas exports to a Swiss company, in a rare energy deal between Teheran and the West as their nuclear showdown drags on.

Two parties wouldn't precise the financial information but the agreement between Iran’s state gas firm and Switzerland's Elektrizitaets-Gesellschaft (EGL) Laufenburg through hearsay anticipates Iran supplying 5.5 billion cubic meters of gas annually from 2011. The gas will be pumped to one of EGL’s power stations in Italy.

The accord comes despite US pressure on European countries to cut their business ties with Teheran as a means to pressure it to give ground in the nuclear crisis.

The implementation of the accord depends on the construction of the planned Trans Adriatic Pipeline (TAP) which will connect Greece with Italy and provide better access for Europe to gas fields in the Caspian Sea and the Middle East. Another major condition will be the ability of Iran, still a net importer of gas, to supply the gas to Europe.

Iran with its great gas reserves is willing to export gas to regional countries like Armenia, Pakistan and Syria, as well as Europe. But process is being stymied by a lack of foreign investment in developing gas fields, a problem exacerbated by the reluctance of many Western businesses to deal with the country under current political conditions.