Shanghai: China and Iran are close to setting plans to develop Iran's Yadavaran oil field, a multibillion dollar deal that comes as Tehran faces the prospect of sanctions over its nuclear programme.According to Caijing, a respected financial magazine, a Chinese government delegation is due to visit Iran as early as March to formally sign an agreement allowing China Petrochemical or Sinopec to develop Yadavaran. The deal would complete a memorandum of understanding signed in 2004. In exchange for developing Yadavaran, one of Iran's largest onshore oil fields, China would agree to buy 10 million tons of liquefied natural gas a year for 25 years beginning in 2009, the report said, citing Sinopec board member Mou Shuling.
The deal is thought to be potentially worth about $100 billion. Chinese and Iranian officials in Beijing said they could not confirm the report.
Staff at Iran's embassy in Beijing said they were aware of the report but had not heard Mou's remarks, which Caijing said were made at a recent embassy event. A written statement from the Iranian Embassy noted that the two countries have been working together in various energy fields.
The Caijing report said that Chinese and Iranian officials met in December for talks on the project. It cited Mou as saying that the two governments and companies involved were moving ahead with the deal despite the controversy over Iran's nuclear programme. Western nations fear it is using the technology to develop weapons, but Tehran claims it is to produce electricity.
According to the Caijing report, Sinopec would hold a 51 per cent stake in the Yadavaran project, with India's Oil and Natural Gas Corp (ONGC), taking 29 per cent. The remainder would go to Iranian companies and possibly to Royal Dutch Shell, which has also expressed interest, it said. The report said there was some disagreement over intended capacity, with Iran asking China to agree to daily output of 300,000 barrels of oil, while Sino-pec preferred to set a target of 180,000 to avoid excess production.
Sinopec, Asia's largest refiner, has shares traded in New York, London, Hong Kong and Shanghai.