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Shah Deniz project not to be affected by Iran sanction bill

By A.Badalova British and European Union officials have convinced some U.S. lawmakers to ensure that any new sanctions against Iran exempt a BP PLC-led natural-gas project, as Western governments try to isolate Tehran without harming their own energy security, The Wall Street Journal reported.

"There is broad-based consensus in the House and Senate that our sanctions policy should impose maximum economic pain on the Iranians without allowing Russia to hold Eastern Europe hostage for energy supplies," said a congressional aide familiar with the European lobbying effort.

Officials from the British Foreign Office, the EU and BP say they asked Capitol Hill lawmakers in December to ensure that new sanctions don't block the project on the second phase of Azerbaijani Shah Deniz gas condensate field development, in which Iranian state-owned company Naftiran Intertrade Company (NICO) holds a 10-percent stake.

The contract to develop the offshore Shah Deniz field was signed June 4, 1996. Participants to the agreement are: BP (operator) - 25.5 percent, Statoil - 25.5 percent, NICO - 10 percent, Total - 10 percent, LukAgip - 10 percent, TPAO - 9 percent, SOCAR-10 percent.

The field's reserves are estimated at 1.2 trillion cubic meters during the first stage. Additional 16 billion cubic meters is planned to be produced within the second phase of the field development.

Gas, which will be produced during the second phase of Shah Deniz field development, is considered as the main source for the projects within the Southern gas Corridor. Within the Shah Deniz-2 project Azerbaijan plans to export 10 billion cubic meters of gas to Europe.

The Shah Deniz-2 project could have been hit by a bill by Rep. Ileana Ros-Lehtinen (R., Fla.) that would ban any company doing business with Iran's oil and gas sector from operating in the U.S. But the current version of the legislation includes language that says it won't affect efforts "to bring gas from Azerbaijan to Europe and Turkey," or to achieve "energy security and independence from Russia."

The Ros-Lehtinen bill is now with the Senate's committee on foreign affairs. Ms. Ros-Lehtinen's foreign-affairs spokesman didn't respond to requests for comment.

EU and U.K. officials say they are closely monitoring other congressional proposals that could hit Shah Deniz II in 2012, a U.S. election year in which targeting Iran could score political points.

"It's a continuous story," said an EU official. The fact that there is now a proposed exemption "doesn't mean that [the issue] won't come back further down," he explained. "You never know-it's not a short-term matter."

The U.K. supports a policy that "balances the desire to put pressure on Iran over its nuclear program and makes sure it does not have an adverse impact on European economies," said a British Foreign Office spokesman, who confirmed the lobbying on behalf of BP .

The spokesman said it wasn't a contradiction to want an exemption for Shah Deniz II and seek stringent sanctions at the same time.

© Trend News Agency 2012