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Reuters: Iran could help Europe mett energy needs-Total

By Tim Hepher

BEIJING, Nov 25 (Reuters) – Oil company Total SA, battling to preserve a major gas investment in Iran amid French government pressure on businesses to trim their dealings there, is playing the energy security card by highlighting Iran’s huge gas reserves.

Total CEO Christophe de Margerie told Reuters that Iran could be a valuable source of new energy supplies as Europe frets about possible gas shortages and heavy reliance on Russia.

De Margerie said talks over the South Pars development had slowed, but denied this was the result of a French government call in September to show restraint in dealing with Iran as the West tries to rein in its nuclear program.

“Today I would be happy to have a (South Pars) contract ready for signing, but there is no contract yet,” he said. “Sometimes you have to soft-pedal a bit, but with Iran we will preserve a long-term relationship.

“Maybe there is something to be done as far as the supply of energy to Europe is concerned,” de Margerie said, speculating that supplies could be shipped or piped via Turkey.

The oil executive was speaking to Reuters at a dinner for French business leaders in Beijing to mark a state visit to China by French President Nicolas Sarkozy.

France has toughened its opposition to Iran’s nuclear enrichment program since Sarkozy was elected in May and supports new international sanctions, which China opposes.

The West fears Iran aims to produce atomic weapons, but Tehran says it only wants to produce electricity.

Sarkozy was due to discuss the standoff with Chinese President Hu Jintao on the second day of his visit on Monday.

De Margerie’s call to consider the benefits of Iran as an energy supplier to Europe comes amid growing debate in the region over its reliance on Russia for gas supplies.

A dispute between Russia and Ukraine over gas prices led to a cut in supplies to some European Union countries in January 2006.

Italian oil company Eni (ENI.MI: Quote, Profile, Research) agreed last week with Russian gas export monopoly Gazprom (GAZP.MM: Quote, Profile, Research) to form a 50/50 joint venture to operate a new gas export pipeline to south Europe costing at least 10 billion euros.

Total is negotiating to build Iran’s first liquefied natural gas (LNG) export terminal, Pars LNG.

Tehran has told Total and Shell to finalise their gas deals with Iran by June 2008 or the giant South Pars gas project will go ahead without them.

In September, France urged companies to exercise restraint in dealing with Iran as it, along with the United States and Britain, push for a fresh wave of U.N. sanctions against Iran over its nuclear program.

De Margerie last week said Total wanted to pursue its projects in Iran. (Editing by Maureen Bavdek)

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