DUBAI, Jan 18 (Reuters) - Iran sits atop the world's second largest gas reserves and has signed deal after deal to supply rapidly growing international demand, but it will take at least 10 more years to become a major gas exporter.

Sanctions, political wrangling, soaring domestic consumption and the demands of the oil industry have hindered Iran's plans to join the global boom in liquefied natural gas (LNG) exports and will do so for years, analysts say.

"It's optimistic to think that by 2011 you'll have any one of these large natural gas export projects online," said Julia Nanay, of PFC Energy in Washington. "And it will be at least a decade before we see significant volumes of exports from Iran."

International companies had aimed for a quicker start but energy-hungry Asian countries that signed up for Iran's gas would have to look elsewhere in the meantime, analysts said.

"I think these projects will eventually come up, but they may be several years behind their current time frames," said Colin Lothian, senior analyst for the Middle East at global consultancy Wood Mackenzie.

"There is still not a single LNG project being built in Iran. And pretty much every other oilfield and gas expansion project has also faced start-up delays."

Freezing natural gas to liquid form allows it to be exported by tanker worldwide, rather than limited by pipeline connections.

France's Total agreed to build Iran's first LNG terminal in February 2004 with an initial start date of 2009. Three years later, Total and Iran are still negotiating terms and the start date has been pushed back to 2011.

Despite the lack of actual progress on projects, Iran continues to sign up more companies to develop fields and buy its exports. In the past month alone, it has signed preliminary deals to develop gas fields and build LNG terminals worth a total of $32 billion with Malaysia's SKS and China's CNOOC.

Analysts and executives say the deals mean little until Iran shows it can provide the investment environment for companies to get gas export facilities up and running.

"Iran is happy to sign as many memorandums of understanding as it can," an executive at one foreign energy company in Iran said. "But where are the terminals, where are the pipelines for export? They can negotiate with as many countries as they want. The bottom line is they don't have the capacity."

SANCTIONS

U.S. sanctions since 1995 targeting Iran's oil and gas sector have hindered LNG development as the most commonly used technology is from the United States, Wood Mackenzie's Lothian said.

The continuing row with the United States over Iran's nuclear ambitions has also stifled investment as companies look to avoid the risk that the dispute may escalate.

"There are some political considerations hindering foreign investment," said Ali Arrehchi, oil and gas consultant at Atieh Bahar in Tehran. "That has probably delayed some of the investment decisions."

Domestic politics were also a potential risk to foreign investors, analysts said.

A lobby in Iran's parliament is fighting to limit gas exports and give priority to meeting rapidly growing domestic demand and oilfield reinjection needs.

Government subsidies have encouraged demand growth, making the country the world's fifth largest gas consumer. It burns more gas than Europe's largest economy Germany.

Despite its massive reserves, Iran has been a net importer of gas since 2002. It brings in a small volume of gas from neighbouring Turkmenistan.

As demand grows and new projects to boost domestic supplies slip, Iran's future gas export potential is being eroded.

Iran uses over a quarter of the natural gas it produces for reinjection into its ageing oilfields to maintain reservoir pressure and increase recovery of oil, PFC said in a recent report. It estimates that Iran may need to double the volumes of gas that it injects by 2030.

Delays in bringing reinjection projects on line were also hurting Iran's oil output, analysts said.

The relatively high price of oil on international markets makes reinjection to boost crude output more profitable for Iran than exporting its gas, providing little incentive for officials to push on with gas negotiations, analysts said.

In addition to its LNG plans, Iran has deals or is in talks to export gas through pipelines with several countries including India, Pakistan, Austria, Armenia, Kuwait and the United Arab Emirates.