Pipeline Ok Aims To Build Turkey Relations U.S. Decision Overlooks Iran Sanctions To Give Support To New, Secular Government

Sending political signals to both Turkey and Iran, the White House has decided not to oppose construction of a $1.6 billion pipeline that would carry natural gas from Central Asia through Iran to Turkey, Clinton administration officials said Saturday, even though the project could be deemed a violation of U.S. economic sanctions against Iran.

The decision is first and foremost a sign to Turkey that the United States wants to cooperate with and help the new secular government, headed by Prime Minister Mesut Yilmaz, that last month replaced a controversial Islamist-led government, officials said.

On a broader level, the move also signals to the Turkish people, who are likely to face elections within the year, that Washington prefers to deal with a secular government.

But the decision will also have the side effects of sending a smaller signal to Iran at a critical moment in the history of that country’s Islamic revolution, with the inauguration of President-elect Mohammad Khatami, a relative moderate, a week away.

The administration recently made secret overtures to Khatami as a first step to ending a generation of hostility stemming from the 1979 revolution. Khatami, who is largely responsible for the one earlier, tentative relaxation of the revolutionary government’s strict Islamic practices, won a stunning upset victory in May over the regime’s favored hard-line candidate.

The financial gain could be enormous for economically troubled Turkey, which has lost billions of dollars in income since closing its oil pipeline from Iraq in 1990 because of U.N. sanctions against Baghdad. Iran’s income would be limited to transit fees and be of comparatively minor benefit.

But the pipeline would potentially give Iran a role in the development of vast energy reserves in Central Asian nations. Virtually every major oil company in the world is prospecting in Central Asia’s deserts, which are thought to contain major oil reserves.

The pipeline plan marks one of the first times since 1979 that Iran has been permitted to participate in a major international energy project.

The pipeline would transport natural gas from Turkmenistan, a former Soviet republic that has been described as the Kuwait of Asia. But the landlocked country’s existing oil infrastructure was built during the Cold War, and all its pipelines still go to Russia.

The United States has long sought ways to loosen Russia’s grip on the huge Caspian Sea energy field, which is second only to the Persian Gulf in size. The potential market for Turkmenistan is far greater than just Turkey - eventually the pipeline could be linked to Middle Eastern and European networks.

The decision may help reverse increasing criticism from Turkey’s parliament and its people over the costly use of their country as a staging point for U.S.-led operations against Iraq.