"We signed a deal with China National Petroleum Corporation (CNPC) to develop the upstream sector of phase 11 in the offshore South Pars gas field," the National Iranian Oil Company (NIOC) managing director Seyfollah Jashnsaz was quoted as saying.
The deal is "worth 4.7 billion dollars and the aim of implementation of this project is to produce 50 million cubic metres (1.76 billion cubic feet) a day of natural gas and other products," Jashnsaz said.
The signing of the deal came after Iran repeatedly extended a deadline for completion of a 2004 initial deal with France's Total and Petronas of Malaysia to develop and produce LNG from phase 11.
Total had a stake of 50 percent plus one share in phase 11 of South Pars, which has total reserves of about 500 trillion cubic feet (14 trillion cubic metres) of gas — or about eight percent of world reserves.
"Due to repeated delays by Total in finalising the upstream deal we signed it with CNPC," Jashnsaz said. "But Total can continue talks on the downstream sector and the LNG project if it wants to."
Iran, OPEC's second largest oil exporter, also has the world's second largest natural gas reserves.
The delay was caused by a rise in cost of the project and international sanctions on Iran over its nuclear drive, which the West suspects is a cover for ambitions to build atomic weapons.
Western governments have put pressure on international firms to cut ties with Iran because of the nuclear standoff.
