China and Iran are close to setting plans to develop Iran's Yadavaran oil field, a Chinese magazine reports, a multibillion dollar deal that comes as Tehran faces the prospect of sanctions over its nuclear program.
According to Caijing, a respected financial magazine, a Chinese government delegation is due to visit Iran as early as next month to formally sign an agreement allowing China Petrochemical Corp., 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 9 million tonnes of liquefied natural gas a year for 25 years beginning in 2009, the report said, citing Sinopec board member Mou Shuling.
Chinese and Iranian officials in Beijing said they could not confirm the report.
"I know nothing about this. I can't answer your questions," said Ma Li, a spokeswoman for the National Development and Reform Commission, the planning agency in charge of China's energy and resources industries that Caijing said would dispatch officials to Iran.
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.
Calls to Sinopec's headquarters were not answered late yesterday.
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 program.
According to the Caijing report, Sinopec would hold a 51 percent stake in the Yadavaran project, with India's Oil and Natural Gas Corp, or ONGC, taking 29 percent. 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 Sinopec preferred to set a target of 180,000 to avoid excess production.
China has strongly urged that a diplomatic solution be found to the impasse over Iran's nuclear program.
Western nations fear that Iran plans to develop nuclear weapons, but Iran insists its intentions are purely for generating electricity. Growing international concern about its aims contributed to Tehran being reported to the Security Council by the International Atomic Energy Agency's 35-nation board.
On Thursday, French Foreign Minister Philippe Douste-Blazy, accused Iran of secretly making nuclear weapons.
The UN Security Council is due to consider Iran's nuclear activities next month. The council has the power to impose economic and political sanctions on Iran, but members China and Russia could exercise their veto power against such measures.