Story Not Over On Iranian Energy Deal

Although Turkey did not sign an energy agreement with Iran during Ahmadinejad's visit, Foreign Minister Ali Babacan is due in Tehran in two weeks to further discuss the potential accord. Energy cooperation with Iran will diversify Turkey's energy portfolio.

Iran is Turkey's third biggest natural gas supplier. Turkey's investments in gas production in Iran are estimated at $3.5 billion. Turkey, which is a net importer of gas and oil, has been trying to find a way to use its geographical position between Europe and the energy-rich Caspian to import gas and sell it on to Europe.

Last July Turkey and Iran signed a preliminary agreement to export Iranian gas to Europe through Turkey, including a provision for Turkey to produce 20.4 billion cubic meters of natural gas in Iran's huge South Pars gas field. (TDZ, Aug. 16)

Natural gas prices have peaked in recent months, and Turkey is desperate to increase its supply and possibly strike an accord similar to that it made last July.