WASHINGTON -- Despite a new law meant to discourage foreign investment in Iran's oil and gas industry, the Clinton administration has decided not to object to a $1.6 billion project to build a natural gas pipeline through Iran, administration officials said yesterday.
The officials insisted, however, that the administration's tacit approval of the project did not reflect any easing of its long-standing efforts to isolate Iran economically and diplomatically.
Even though the Islamic government in Tehran would stand to profit by charging transit fees, the administration has concluded the project would not constitute an investment in Iran's industry and that therefore it would not provoke sanctions under the Iran-Libya Sanctions Act of 1996.
The officials said that the administration has signaled that it would not oppose the project because the pipeline's primary beneficiaries would be the two countries on either end of it -- Turkmenistan and Turkey -- and not Iran.
The pipeline, stretching 2,000 miles from Turkmenistan, through Iran and into Turkey and perhaps beyond to Europe, would cost $1.6 billion and could eventually carry 30 billion cubic meters of natural gas to energy-deficient Turkey.
The White House reiterated firm U.S. opposition to Iran. "There's been no change in policy or any signal regarding that policy," a White House spokeswoman, Anne Luzzatto, said yesterday. "It is U.S. law and U.S. policy to seek to deny Iran the resources it needs to pursue terrorism and weapons of mass destruction."
The Sanctions Act of 1996, sponsored by Sen. Alfonse D'Amato, a New York Republican, gives the president the power to impose sanctions on foreign companies that invest $40 million or more a year in the oil or gas industries in Iran or Libya.
Pub Date: 7/28/97
