BEIJING (Interfax-China) - Sinopec will soon finalize a deal with the Iranian government for a 51% stake in the Yadavaran oilfield and an annual supply of 10 million tonnes of liquefied natural gas (LNG) to China, a high-ranking Iranian diplomat told Interfax.
"Both sides are presently studying the agreement and will soon meet to address and finalize [it]. This is a very big deal and before finalizing, it requires detailed inspection of some remaining issues in the agreement which are related to some legal and technical matters," said Farhad Assadi, Charge d'Affaires (ad interim) for the Iranian Embassy in Beijing.
Iran and China have been communicating closely on issues relating to the deal, including the strong fluctuation in international oil prices since the deal was signed, said Assadi.
China and Iran signed the MOU in Beijing in October of 2004. According to the agreement, Sinopec is allowed to participate in the development of the oilfield and China will be supplied with 10 million tonnes of LNG per year for 25 years. The project is estimated to be worth $70 billion.
The Yadavaran oilfield has more than 30 billion barrels of proven crude reserves.
Despite the impact the Iranian nuclear dispute has had on international oil prices, it has not created any problems for the Sino-Iranian economic relationship, said Assadi.
During the visit to China of Iran's President Mahmoud Ahmadinejad for the Shanghai Cooperation Organization in June, Iran's Energy Minister and the head of the country's oil ministry met with the National Development and Reform Commission (NDRC) Director Ma Kai to discuss the expansion of oil and natural gas trade and cooperation between the two sides, said Assadi.
China and Iran plan to extend energy cooperation into retail sales services, technical development, exports and other fields, Assadi said.
(c) InterFax-China 2006. For more intelligence on Chinese metals and mining, click here or call Alison Crawford in London on +44 (0) 20 7256 3919.