Spain's Repsol backs Gas Nat/Iberdrola deal-report

MADRID, July 6 (Reuters) -Repsol (REP.MC: Quote, Profile, Research), Gas Natural's (GAS.MC: Quote, Profile, Research) second-biggest shareholder, would like to see a merger between the gas utility and power producer Iberdrola (IBE.MC: Quote, Profile, Research), Repsol's chairman said in an interview published on Sunday.

In an interview with Barcelona newspaper La Vanguardia, Repsol's Antonio Brufau said a merger between the two still makes sense after he twice failed to buy Iberdrola when chairman of Gas Natural in 2000 and 2003.

"That interest continues. The project makes sense," said Brufau.

Oil producer Repsol controlled Gas Natural at the time of the failed acquisition and it still owns 30 percent.

A merger would protect both companies from French interest.

The new GDF Suez GAZ.PA (LYOE.PA: Quote, Profile, Research), the energy giant formed by the merger of Gaz de France and Suez, has said bidding for Gas Natural is an option if asked by Gas Natural's biggest shareholder, savings bank La Caixa.

And earlier this year Iberdrola's independence was threatened by interest from France's EDF (EDF.PA: Quote, Profile, Research) which revived talk of a defensive merger between Gas Natural and Iberdrola.

Brufau said a Gas Natural/Iberdrola deal had to make sense on its own merits, not just as a defence against foreign manoeuvres.

"I don't see that there are alternatives," Brufau said of a merger between the two, before reiterating his opposition to a possible bid for Gas Natural from GDF Suez.