International tenders for the Turkish section of a gas pipeline from Tabriz in Iran could be invited by the end of the year, for a construction start in 1996, says Hayrettin Uzun, head of Turkey’s state pipeline and gas agency, Botas. The Iranian section of the estimated $1,000 million pipeline will probably be built by an Iranian company, or an Iranian-Turkish contracting venture, and financed by Iranian gas supplies, he added

Iran and Turkey concluded a deal providing for the supply of natural gas valued at a total of $20,000 million over a 23 year period, days after President Clinton announced a US embargo against Iran.

The imports will start at 2,000 million cubic metres of gas in 1998, rising eventually to 10,000 million cubic metres from 2002 onwards, says Uzan. Botas argued in May that this was not enough to construct a pipeline, but is now viewed as evidence of Turkey’s determination to continue trade with Tehran, and not join the US embargo, analysts say.

However, a larger gas pipeline project from Turkmenistan to Europe, via Iran and Turkey, could encounter financing problems, because of the US embargo on Iran, industry sources say.

A meeting of the Turkmen gas project’s overseeing council, headed by Turkmenistan’s President Saparmurad Turkmenbashi, and including representatives from Iran, Turkey, Russia and Kazakhstan, is due in July in Vienna, the pipeline’s proposed terminus.

A total 2,000 million cubic metres of gas is hoped to be exported annually on completion of the project up to the main customer, Turkey, by 1998, rising to 5,000 million cubic metres by 2004. Demand in Europe will not prove sufficient until after 2005.