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Austria to be first in Europe to get Iranian gas

Austria will be the first European nation to be offered Iranian gas once the Nabucco pipeline begins service, Kazem Vaziri-Hamaneh, Iran's oil minister, said.

Iran is determined to ship gas to Europe, the minister said on Petroenergy Information Network, the ministry's press agency. The Islamic Republic will take “serious steps” to ensure Austria is first in line once Nabucco prepares to operate, he added. The project, a natural-gas pipeline that could cost as much as € 5 billion ($6.4 billion), is planned to extend from Turkey to Austria, a route about 3,300 kilometers (2,051 miles) long, and carry about 31 billion cubic meters of gas a year when it opens in 2011. Gas from Iran could flow over the Ebriz-Erzurum pipeline connecting the Islamic Republic and Turkey, OMV AG CEO Wolfgang Ruttenstorfer said last month. Austria's OMV leads the pipeline group, which also includes Bulgaria's Bulgargaz AD, Hungary's Mol Rt., Romania's Transgas and Turkey's Botas. The consortium may add Russia as a sixth partner and plans to start construction in 2008. OMV said in January it found oil in Iran in the Western Zagros region for the first time. OMV holds a 34% stake in the block, known as the Mehr Block. Spain's Repsol YPF SA and Sipetrol of Chile both also hold 33% of the field. Iran expects Austria to take part in tender bids for exploration and development of another 17 hydrocarbon blocks, Vaziri-Hameneh told Petroenergy, without elaborating. Iran, under US economic sanctions and at odds with the US and several European Union nations over its nuclear program, is seeking more friendly markets. (Bloomberg)