China's Sinopec in talks over Iran LNG deal

China's Sinopec in talks over Iran LNG deal

Agence France-Presse, Beijing

Chinese oil giant Sinopec is in talks with Iranian firms to
import at least five million tons of liquefied natural gas (LNG)
annually, in what would be a multi-billion dollar deal, state
media reported on Monday.

Citing Iranian Vice President Mohammad Sattarifar, the China
Daily said that in return Sinopec would win the right to exploit
some of Iran's richest oilfields.

Sinopec is negotiating with National Iranian Oil Gas Export
Company and the National Iranian Oil Company with senior Sinopec
executives set to visit Iran next month, Sattarifar said.

"All Chinese companies are welcome to market Iranian LNG," he
said.

"Both China and Iran see each other as long-term partners.
Iran takes China as an energy market while China can take Iran as
a long-term energy supplier.

"We hope to strengthen our cooperation in exploring and
developing natural oil and gas fields and oil refineries too."

Iranian Vice Oil Minister Hadi Nejadhosainaian was in Beijing
last month to push through the deal, the paper said, citing
sources as Iran's Beijing embassy as saying agreement should be
reached this year.

The move follows state-owned oil trader Zhuhai Zhenrong Corp.
last month signing a US$20 billion deal to buy 110 million tons
of LNG from Iran over 25 years.

Zhuhai Zhenrong said that it had signed a "framework
agreement" in March to purchase 2.5 million tons of LNG annually
from Iran starting in 2008.

Analysts said that, if successful, Chinese companies would
catch up with the likes of French Total and Royal/Dutch Shell as
the largest investors in Iran's oil and gas industry.

Besides generating electricity, imported LNG is expected to be
used to power Chinese industry, fuel local residential gas grids
and run China's growing public transport fleets of compressed and
liquid natural gas buses and taxis.