Iran suspends China-funded $3.3bn LNG project

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Photo – EPA

Iran suspended a Chinese contract to build a liquefied natural gas plant in the Gulf port of Asaluyeh “until further notice,” the Mehr news agency reported on Monday.

Tehran decided to halt the €2.6 billion ($3.3 billion) contract because the Chinese group involved was unable to finance the project, the state-run agency said.

Mehr news report said Iran LNG Co., an affiliate of the National Iranian Gas Export Co., signed the accord with Chinese counterparts in 2008. The facility, to be built in two phases over six years, was to produce 10.5 million metric tons a year of LNG and other products such as gas condensate, the report added.

according to BP Plc data, Iran holds the world’s largest deposits of natural gas after Russia. Gas producers worldwide chill and convert the fuel into a liquid so as to export it more easily using specialised tankers. Iran faces tighter international sanctions on its energy and financial industries because of its suspected nuclear programme which the US and allied nations say may be conceal an effort to develop atomic weapons. The Islamic Republic counters that it wants nuclear expertise for energy and other peaceful purposes.

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