US upset with Swiss-Iranian deal

24 heures - Lausanne,Switzerland

Switzerland angers the United States by inking an energy agreement with Iran that will see more than five billion cubic meters of natural gas piped annually to Zurich by 2011.

Switzerland will be relying on Iran for a portion of its natural gas supplies under a deal that has raised concerns in the US. Swiss Foreign Affairs Minister Micheline Calmy-Rey was in Tehran yesterday to formalize a deal that will see 5.5 billion cubic meters of gas shipped annually for 25 years, starting in 2011. The agreement was reached between the Iranian government and EGL, a Zurich utility company, for an overall cost estimated between SFr18 billion and SFr27 billion.

The American government, which has been critical of Iran’s controversial nuclear program, was quick to vent its displeasure over the development. "We have conveyed to the Swiss that major new oil and gas deals with Iran send precisely the wrong message at a time when Iran continues to defy UN Security Council resolutions," the US embassy in Bern said in a statement, according to AFP.

Calmy-Ray said the bilateral deal did not violate UN sanctions imposed on Iran over its nuclear program and served only to secure uninterrupted energy supplies for Switzerland. "We have a strategic interest to secure our gas supplies and diversify our gas suppliers," Calmy-Rey said. She said the current deal may reduce Europe's dependency on energy supplies from Russia. "We are decreasing our dependence, and the dependence of Europe, on Russian gas."

The agreement with Iran is dependent on the construction of a new SFr2.35 billion pipeline linking Italy and Albania to transport gas that will travel through Azerbnaidjan and Turkey. EGL, the Zurich utility, has agreed to finance 10 percent of the pipeline’s cost. The agreement emerges at a time when energy costs continue to soar. Russia's energy giant Gazprom announced last week that the average price for natural gas for Europe in 2008 could reach $400 per 1,000 cubic meters, 13 percent higher than previously expected.