Turkish Energy Minister Hilmi Gulerhas announced his government will invest $3.5 billion in Iran's South Pars gas field starting from 2008, a week after signing a deal to use Iran as a transit route for gas from Turkmenistan to European markets. Ankara also made clear that it sees Iran as a potential partner for the Nabucco gas pipeline project, conceived as a means of diversifying gas supplies to Europe. Washington has voiced its opposition to the memorandum of understanding between Turkey and Iran. In an interview with NTV news this week, Turkish Prime Minister Recep Tayyip Erdogan defended the deal, adding that "Turkey thinks of its own interests and the US will eventually understand this." (Press TV, July 19)

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