Iran in billion-euro gas deal with Germany: company chief

(TEHRAN) - Iran has signed a one-billion-euro (1.44-billion-dollar) deal with a German firm to build 100 gas turbo-compressors, an industry official said in newspapers on Wednesday.

The contract provides for the unnamed German firm to transfer the know-how to build, install and run the equipment needed to exploit and transport gas, said Iran's Gas Engineering and Development Company head, Ali Reza Gharibi.

The German company has already delivered 45 such turbo-compressors to Iran, Gharibi said, according to Iran Daily. Industry experts said he was apparently referring to Siemens.

But the National Iranian Gas Company (NIGC) denied the signing of a deal.

"Following a report about a one-billion-Euro contract between Iran and Germany, the public relation of NIGC denied this," it said on its website.

The NIGC spoke of a contract with an "Iranian company to build 100 turbo-compressors in Iran using a foreign partner's know-how," without naming the firms.

The reported 2010-2015 deal for material not under an international embargo comes as the Islamic republic faces the threat of new financial, technological and international trade sanctions over its disputed nuclear programme.

World powers are weighing sanctions which would boost existing bans on the transfer of material and technology that allows Iran to develop or export its oil and gas resources.

Iran has the world's second largest proven global gas reserves after Russia but so far has played only a minor role on the gas export market.

The development of its gas sector is hampered by a lack of productive investment and growth in domestic consumption, with little left over for exports from the daily output of about 500 million cubic metres (17.6 billion cubic feet).

The equipment and the know-how in the contract with the German firm will help Iran build plants to produce liquefied natural gas (LNG) and export it by ship, newspapers said.

The government daily Iran Daily said the contract was signed at the start of the week and would be a "relief for many German businesses that have long complained about restrictions on trade with Iran" under sanctions.

Germany and China are Iran's top trading partner after the United Arab Emirates, official figures show.