July 29, 2012 / 9:26 AM / 5 years ago

China pulls out of South Pars project: report

2 Min Read

DUBAI, July 29 (Reuters) - China's national petroleum company has pulled out of developing Phase 11 of Iran's offshore South Pars gas field, Iranian media reported on Sunday, blaming the firm for constant and "unprecedented" delays in the project.

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 SA, which it had 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 Mideast Gulf close to the South Pars gas field.

The report said CNPC had delayed the project for more than 1,130 days and had not even begun preliminary steps such as leveling 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.

U.S. and UN 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 (LNG) facilities. (Reporting By Yeganeh Torbati;Editing by Sanjeev Miglani)

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