Berlin looking to cancel German gas firm's deal with Iran

The German government hopes to persuade energy firm Steiner Gastec Prematechnik to cancel a 100 million euro deal with Iran's national gas carrier.

Diplomatic sources in Jerusalem said once news of the deal became public knowledge, Israel's ambassador to Berlin contacted a representative of Chancellor Angela Merkel's office to request her intervention in the matter.

"The message this deal sends is very negative," ambassador Yoram Ben Zeev said. "Especially due to the great sensitivity in Israel on this issue."

Senior German officials responded that Merkel disapproves of the deal. Even though gas is no included as part of the sanctions against Iran over its nuclear activity, the officials said they would seek to hold talks with SGP on the matter.

SGP, the German firm, is to supply Iranian factories with equipment to turn gas into sulphur-free liquid fuel. This would enable the factories to transport the gas more efficiently to customers across the world.

Germany's Federal Agency for Economics had scrutinized the deal for a year before giving its final approval on Tuesday.

A number of Jewish groups have scathingly criticized the agreement, blasting Germany's fostering of economic relations with Iran despite the Islamic Republics nuclear program and its threats toward Israel.