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Tue 28 Aug 2007 12:35 PM

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Turkey-Iran plants to be completed in three years

Plants announced earlier this month to be operational by 2010, official says.

The construction of three Turkish-Iranian power plants, announced earlier this month, will be completed within three years, a Turkish energy ministry official said on Tuesday.

The power plants will consume a combined 10 billion cubic metres of natural gas annually, which will be supplied from Iranian reserves, an Iranian official said.

"The two countries have come to an agreement on this issue. The necessary natural gas will be supplied from Iran. According to the pre-deal agreements, the plants will be built by the private sector," the Iranian official told Reuters, speaking on condition of anonymity.

Turkey has also planned a 10,000 megawatt hydroelectric power plant with Iran.

Each of the three gas-fired plants will have a capacity of 2,000 megawatts.

"The construction of the three power plants and the production of electricity will be completed within three years," a Turkish energy official said.

While Turkey has gained guarantees from Iran for the sale of natural gas, electricity producers operating the power plants will not receive purchase guarantees from Turkey for the sale of electricity there.

A memorandum of understanding, signed between Tehran and Ankara this month, has laid the groundwork for the three plants to be built in eastern Turkey, Tabriz in Iran, and a third location yet to be determined.

Turkey has been strengthening its ties with Iran over the past months after a Turkish energy official said Turkey had agreed to invest $3.5 billion in Iran's South Pars gas field.

Turkey is a net importer of energy and faces sporadic shortages when consumption rises or supplies fall, as often happens in winter.

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