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Iran and China are beginning talks on the use of China’s currency the yuan as their main energy-trading currency to settle oil purchases.

Tehran, July 24, 2010 (Hamsayeh.Net) - Historic neighbors, Iran and Turkey signed a contract on the construction of a major gas pipeline that would transfer Iran’s vast natural gas reserves to Turkey and Europe.

The 660 km pipeline complements an already existing pipeline connecting Iran’s gas supplier to Turkey at 25 million cubic meters per day that could be increased to 30 million cubic meters per day. The new pipeline due to begin operation in three years will add another 50 to 60 million cubic meters of gas export to Turkey and most likely southern Europe if both Turkey and Europe reached an agreement on a transit fee.

Turkey’s rapid economic growth in recent years has also increased its demand for fresh supplies of natural gas. The deal could pose a major blow to Washington’s policies, which has been seeking to isolate Turkey and Iran.

On Friday Iran’s Oil Minister Masoud Mir-Kazzemi and Turkey’s ASB Co. one of the largest energy companies in the country signed a 1 billion euro deal to build the pipeline. The deal would ensure a steady and long-term cooperation in he field of energy between the ancient neighbors.

Also in another development, Iran and China are beginning talks on the use of China’s currency the yuan as their main energy-trading currency to settle oil purchases. China has recently overtaken the United States in its domestic use of energy and Iran represent China’s third largest oil supplier.

Of late, Beijing has become increasingly concerned about western particularly the American secret plans to harness and contain its growing role on the world stage. United States under the pretext of countering an illusory North Korean threat is building a huge military base near China. It seems that Washington is hoping that a future major military confrontation in eastern parts of Asia could, at least temporarily, halt exports from the region, which could in turn boost American exports.

The new gas pipeline will increase Iran's gas export to Turkey by 50-60 million cubic meters per day.

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