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Dec 28

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Iran may terminate $5 bln gas deal with China

Iran’s oil ministry spokesman, Alireza Nikzad-Rahbar, said Tuesday that its long-delayed $5 billion offshore gas exploration contract is due to the lack of inclination from China National Petroleum Corporation (CNPC) to push ahead with the project.

CNPC and the National Iranian Oil Company (NIOC) signed the contract in 2009 to develop the South Pars Gas Field, which currently holds around 8 percent of the world’s natural gas reserves.

South Pars, a huge offshore natural gas field shared between Iran and Qatar, holds around 14 trillion cubic metres of gas, and Iran plans to use the “Phase 11″ project to fill its first-ever liquefied natural gas plant, according to the Energy Tribune.

“On the order of [the Iranian] Oil Minister [Rostam Qasemi], the development of the offshore section [of Phase 11], including design, construction, installation and operation of offshore platforms, subsea pipelines and gas well-drilling, will be given to domestic contractors,” Nikzad-Rahbar said. “The Chinese company has said that development of Phase 11 of South Pars, particularly in its offshore sector, is high-risk and another field with lower risk will soon be offered to the Chinese.”

According to the ChinaScope Financial, China has aimed to strengthen its economic relationship with sanctions-heavy Iran. However, Iran has accused China of failing to fulfill its commitment and delaying its contractual obligations.

Last year, Iran suspended a $16 billion contract with China for the North Pars Gas Field, saying that the Chinese participation in the gas field development would affect the effectiveness in developing South Pars.

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Re: morningwhistle.com

Permanent link to this article: http://www.mfanni.com/iran-may-terminate-5-bln-gas-deal-with-china/

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