China Signs US$3.2 Billion Gas Deal with Iran

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Mar. 16 – China has signed a three-year natural gas deal with Iran worth US$3.2 billion to develop the South Pars field underneath the Persian Gulf seabed; said to be the world’s largest natural gas reservoir.

The deal comes after the United States announced renewed business sanctions against Iran and highlights how using economic pressure to make Iran give up its nuclear program will be even made more difficult. The energy pact will also include partnering with another European country yet unnamed.

The United States has been enforcing embargoes on Iran and forbids foreign companies that do more than US$10 million a year worth of deals in the country from working in the United States.

Iran provides 14 percent of China’s oil needs. It has also signed energy deals with the Danish firm Haldor Topsoe worth US$1.3 billion and Italy’s Maire Tecnimont worth US$260 million.

Iran has been promoting its huge energy deals as a way of vindicating U.S. efforts to isolate Tehran, reports the AP.

President Obama has already called for holding talks with Iran to settle the dispute over its nuclear energy program and support for Lebanese and Palestinian militant groups fighting against Israel.

“The big challenge will be to get the Russians and Chinese on board for tougher actions and sanctions once [the Americans] try to engage and fail,” a Western diplomat in Tehran speaking on condition of anonymity, told the LATimes.