Turkey Backs Out of Financing Iranian Side of Gas Pipeline

ANKARA, Turkey — In an apparent move to avoid breaking a U.S. law penalizing investments in Iran, Turkey said Wednesday that it has withdrawn from an earlier commitment to finance construction of the Iranian side of a gas pipeline.

Turkey’s first Islamist government signed a $20-billion gas deal with Iran on Monday, despite pleas from the Clinton administration to cancel the project.

The Energy Ministry said a clause in an agreement signed last year that required the state-run pipeline company to invest on Iranian territory has been eliminated.

Under the change, each country will build its own side of the pipeline.

President Clinton signed a law last week that lets Washington penalize foreign companies that invest in the oil and gas industries of Iran and Libya, which Washington accuses of backing international terrorism.

Turkey completed the deal with Iran during Prime Minister Necmettin Erbakan’s visit to Tehran earlier this week.

Turkish and Iranian delegations will meet Sept. 10 to discuss the terms of the pipeline construction, according to the statement.

The 22-year deal provides for construction of pipelines to carry up to 350 billion cubic feet of natural gas a year to Turkey. The gas flow is scheduled to begin at the end of 1999.