China signs $3.2-billion gas deal with Iran

China has signed a $3.2-billion gas deal with Iran, holding the world's second-largest natural gas reserves, for the production of 10.5 million tones of LNG annually in Iran's South Pars gas field over the next three years.

The deal was signed in Tehran between a Chinese-led consortium and Iran LNG Company, where the Chinese committed to constructing two Iran LNG project trains - No. 3 and 4 in Phase 12 - with a production capacity of 10.5 million tons of LNG per year at the giant South Pars Gas Field in southern Iran.

South Pars Gas Field in southern Iran, is reported to be the world's largest natural gas reservoir.

Four sections of the project have been implemented so far and have a total capacity of producing 20-million tones of LNG, if the next two phases become operational by 2012.
An Iranian state television quoting a senior government official said that a certain European country will also join the Chinese consortium in the next three months; a significant statement as the US has embargoed business with Iran since the 1990s, and has barred foreign companies from operating in the US if their business volume with the country exceeds $10 million a year.

Ali Khayrandish, the ILC managing director said, ''The Chinese contractors will complete implementation works of the first train in 39 months and the second train in 41 months.''

Dr Seifollah Jashnsaz, the managing director of National Iranian Oil Company (NIOC) said, ''Iran LNG is the most active project which portions 20 million tons of LNG production,'' commenting on the 80-million ton yearly production of five projects - Iran LNG, Persian LNG, Pars LNG and two joint ventures with Chinese and Malaysian firms.