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AFX Asia (Focus): China, Iran to close multi-billion dollar oil, gas deal in coming weeks-report

Feb 17, 2006
BEIJING (AFX) – China and Iran hope to conclude a multi-billion dollar oil-and-gas deal in coming weeks, with a Chinese delegation of top economic-policy makers planning a trip to Iran possibly next month to help finalize the transaction, the Wall Street Journal said.
The report said that an agreement would seal a memorandum of understanding signed in October 2004 under which China's Sinopec would develop Iran's Yadavaran oil field in exchange for buying 10 mln tons of Iranian liquefied natural gas annually for 25 years at a cost of 100 mln usd.
Under the preliminary 2004 agreement, Iran would give the Chinese company a 51 pct stake in the oil field, the overseas subsidiary of India's state-owned Oil & Natural Gas Corp would get a 20 pct stake, and the rest would be owned by National Iranian Oil.
Iranian oil-ministry officials familiar with the China talks said the country is trying to conclude any deals before potential sanctions are imposed on Iran for its nuclear ambitions, according to the Journal.
Iran has restarted small-scale enrichment of uranium despite international efforts to stop it.
The report cited China's National Development and Reform Commission as confirming senior officials would soon be Iran-bound, with negotiations on the energy deal on the agenda.
Caijing magazine last month reported that the Chinese delegation, led by the National Development and Reform Commission director Ma Kai, would visit Iran in March. That report cited a Sinopec board member, Mu Shuling.
Officials from Sinopec declined to answer questions about the deal yesterday, the Wall Street Journal said.
Royal Dutch Shell, which has offered technical advice to Sinopec on the project, said that it remains interested in participating in the future development of Yadavaran.
sr/dk

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