China pulls out of South Pars project

by on July 30, 2012 4:08 am BST

Tehran signed a $4.7 billion contract with China National Petroleum Corporation (CNPC) in 2009 to help develop Phase 11 of South Pars, replacing France’s Total, which was also accused of delays.

Citing information from Iran’s Oil Ministry, Mehr News Agency said CNPC had pulled out its workers from Asaluyeh, the city on the shore of the Middle East Gulf close to the South Pars gas field.

The report said CNPC had delayed the project for more than 1130 days and had not even begun preliminary steps such as levelling land and putting up fencing.

Iran’s National Iranian Oil Company warned CNPC last year that it would “replace CNPC with domestic companies” if the Chinese corporation continued to delay the project.

Iran has the world’s second-largest reserves of natural gas, but it has not yet become a major exporter because of international sanctions over its disputed nuclear programme.

US and United Nations sanctions have deterred investment by Western firms with expertise and technology, and the Islamic Republic is not able to obtain the technology it would need to build liquefied natural gas facilities.