This is despite previous hesitation due to Washington's threats of punitive sanctions, under legislation passed in 1996, against any company doing more than $20 million of energy business in Iran. Given a new administration in Washington less confrontational than its predecessor, Tehran may yet inject itself into Europe's search for energy alternatives, as France's Total, the world's fourth-largest non-governmental oil firm by market capitalization, is finalizing a multibillion-dollar natural gas deal with Iran.

Most strikingly, if the contract goes into operation, Iran will acquire state-of-the-art liquefied natural gas technology, something it has sought for years to no avail, which would allow it to free itself from pipeline exports to be able to ship LNG anywhere in the world.

The Mehr news agency reports that, according to National Iranian Oil Co. head Seyfollah Jashnsaz, Iran and Total are finalizing a $5 billion deal on the Phase 11 development of Iran's South Pars Persian Gulf gas field by the end of the Iranian year on March 20.

An added incentive for Iran to court Europe is the fact that 30 years of bad relations with Washington have left its natural gas reserves largely underdeveloped. The U.S. government's Energy Information Administration reports that "Iran, one of OPEC's founding members, holds the world's third-largest proven oil reserves and the world's second-largest natural gas reserves."

The IEA reported last year that Iran's estimated natural gas reserves stood at 26.5 trillion cubic meters, second only to Russia's proven 47 tcm, 26 percent of the world's total. Of these reserves, Gazprom, the Russian state monopoly that Europeans have come to fear, holds licenses to fields accounting for 60 percent of the reserves; 21 percent is held by other producers and the remaining 19 percent is unallocated.

The IEA reports that "roughly two-thirds of Iranian natural gas reserves are located in non-associated (operating) fields, and have not been developed." It is this potential that is now enticing European energy companies to risk the wrath of Washington to gain entry into Iran's natural gas industry.

The first set of U.S. sanctions against the regime in Tehran were imposed following the 1979 hostage crisis, when Washington froze about $12 billion in Iranian assets held in U.S. financial institutions. Extending Washington's reach, in 1996 Congress passed the Iran-Libya Sanctions Act; ILSA threatened not only U.S. firms but foreign companies and nations with sanctions if they invested more than $20 million in developing Iran's energy resources. The unilateral U.S. legislation's global reach provoked protests worldwide, in particular from the European Union, some of whose members accused Washington of maintaining a hypocritical foreign policy double-standard by promoting ILSA at the same time as attempting to circumvent the Arab League's boycott of Israel.

Last week Iranian Minister of Petroleum Gholamhossein Nozari reported to the Majlis, Iran's parliament, "If we are known as the country with the second-largest natural gas reserves today, this is because the identified natural gas reserves, which were about 8 trillion cubic meters prior to the Revolution, have reached 28.2 trillion cubic meters, and the developments in the natural gas sector in the country, especially the discovery of the large natural gas fields such as South Pars, Azadegan, and Yadavaran, were great accomplishments in the development of petroleum after the victory of the Islamic Revolution."

The epicenter of European attention is the 3,745-square-mile Persian Gulf South Pars-North Dome gas condensate field, straddling Iranian and Qatari territorial waters. South Pars-North Dome is the world's largest gas field, according to the IEA, containing an estimated 51 trillion cubic meters of natural gas, 50 billion barrels of condensate and reserves equivalent to 360 billion barrels of oil. Iran's South Pars South territorial waters portion of the Pars-North Dome field covers 1,428 square miles as compared with Qatar's 2,316 square miles, and both countries are racing to bring their sectors online.

What undoubtedly will fixate Washington's attention on the contract is that under its terms not only will Total assist in developing South Pars' upstream production, but also that Total will construct an LNG plant, a technology that sanctions have precluded Iran from acquiring up to now.

The deal crowns more than a decade of persistent lobbying by Total in Tehran for a slice of Iran's South Pars development. When in 1997 Total first began to explore the possibility of entering the South Pars project, Washington raised the possibility of imposing sanctions, whereupon Total quickly divested itself of its chain of North American gas stations and other assets located in the United States.

Total's exploration and production sector head Yves-Louis Darricarrere was far more downbeat than Jashnsaz, commenting that discussions were moving "very slowly," adding, "Many contracts need to be negotiated -- not only the contract to develop the gas itself but also the contract on the shareholding agreement for the plant."

Total is not averse to taking risks in the volatile Middle East. In 2004 it began construction of a $4 billion natural gas and LNG plant project in Balhaf, Yemen. Overcoming corruption, terrorism and natural obstacles, the Balhaf facility shortly will begin LNG shipments, catapulting Yemen into a select group of nations able to export LNG. Total clearly feels that Washington will not invoke sanctions, and the company already has experience in flouting EU sanctions, as it operates the Yadana Myanmar-Thailand natural gas pipeline on behalf of Myanmar's junta despite the EU prohibitions.

Few things in the Middle East are certain, however, especially those involving energy and foreigners. On Feb. 17 Iran's Etemaad newspaper reported that Nozari's promises about the remaining phases of South Pars coming online have not been fulfilled and that President Mahmoud Ahmadinejad is considering dismissing him, while Parliament reportedly plans to gather signatures to impeach him. For Total to clinch its sanctions-busting deal, it will have to surmount political infighting in both Washington and Tehran, a political and economic Gordian Knot that would have given even Alexander the Great pause.

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