USA: The New Toothless Tiger

US panel to review China-Iran deal, decide on potential sanctions

WASHINGTON : A US congressional committee will review a Chinese-Iranian deal to determine if US sanctions are called for against the Chinese company involved in the 16-billion-dollar gas deal, a US lawmaker said.

Congressman Tom Lantos, a California Democrat and chairman-elect of the House International Relations Committee, said that "when the Congress convenes next week, the International Relations Committee will closely examine the reported 16-billion-dollar Memorandum of Understanding China's state-owned oil company signed with Iran to develop Iranian gas fields.

"Specifically, we will examine whether this agreement activates United States law requiring sanctions against companies involved in Iranian energy development, as is potentially the case here," Lantos said in a statement.

"Congress recently extended and strengthened the Iran Sanctions Act, as part of legislation which I co-sponsored, and China needs to be warned of the serious penalties it may incur if it pursues implementation of this agreement," he added.

On December 21, China's top energy firm, PetroChina, confirmed for the first time that Iran will supply liquefied natural gas (LNG) in a major deal announced by Iranian state press earlier this month.

Earlier in December, Iranian state press said that the National Iranian Gas Exports Company (NIGEC) would sell China three million tonnes of gas from the Pars LNG project over 25 years, beginning in 2011.

China's booming economy is forcing the country into a global search for energy resources to secure its future growth, and Iran, with its rich gas and oil fields, is one target.

Iran and China's biggest offshore oil producer, CNOOC, signed a preliminary 16-billion-dollar deal to develop a giant natural gas field, Iran's semi-official Fars news agency reported.

The deal is aimed at developing Iran's northern Pars gas field and building plants to produce liquefied natural gas, with each party taking 50 percent of the produced LNG.

The investment, however, will come from the Chinese side: 5.0 billion dollars for exploration and production, and 11 billion dollars for downstream activities.

The Pars LNG project, which teams up the National Iranian Oil Company, French Total and Malaysian Petronas, is one of three LNG-producing consortia in Iran.

Original article posted here.