TEHRAN (FNA) – Iran will finally sign a contract with China National Offshore Oil Corp (CNOOC) this week to develop its northern Pars gas field.
The Oil Ministry’s news website SHANA said the contract will be signed on Wednesday and was believed to be worth about $16 billion.
The deal was first announced in late 2006. At that time the value was put at about $20 billion. An Oil Ministry official confirmed to Reuters the deal would be signed without elaborating.
The contract will mark the latest move by a Chinese firm into the Iranian energy market when the United States is seeking to isolate Iran over its nuclear progress and encouraging foreign firms to cut business ties.
Iran plans to export the northern Pars production in the form of liquefied natural gas (LNG).
CNOOC, which leads China’s LNG industry, is the parent of Hong Kong and New York-listed CNOOC Ltd.
SHANA said northern Pars field contains 80 trillion cubic feet of gas and said each phase of development could have the capacity to produce 1.2 billion cubic feet per day. It said the deal will be signed by CNOOC and Iran’s Pars Oil and Gas Company.
China’s Sinopec Group, parent of Sinopec Corp., signed a deal in December to develop Iran’s huge Yadavaran oil field.
China has in recent years expanded commercial ties with the Islamic Republic and has been rejected the US calls for imposing tough economic sanctions on Tehran. Iran is China’s third largest supplier of oil.
Iran has the world’s second-biggest crude reserves after Saudi Arabia and the second-largest gas reserves behind Russia.