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US Cautions China Over Reported Iranian Gas Deal January 9, 2007

Posted by notapundit in US News, World News.
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BEIJING (AP)–The United States has urged China to reconsider a reported multibillion dollar natural gas deal with Iran amid international efforts to sanction Tehran for its nuclear programs, a U.S. Embassy spokeswoman said Tuesday.

China’s No. 3 oil company, China National Offshore Oil Corp., was reported last month to be in talks to develop Iran’s Northern Pars gas field. Around the same time, the U.N. Security Council unanimously agreed to impose sanctions on Iran for refusing to suspend a uranium enrichment program that is suspected of being part of a nuclear weapons project.

Given the sanctions and Tehran’s continued defiance, “We think this is a particularly bad time to be initiating major new commercial deals with Iran,” U.S. Embassy spokeswoman Susan Stevenson said in an e-mail.

Stevenson said U.S. Embassy officials broached the issue in late December with the oil company, known as CNOOC, and with Chinese authorities she would not specify.

The U.S. officials were told that “no final agreement between CNOOC and Iran has been reached,” she said.

China has tread a careful line on Iran. Though worried about nuclear proliferation and wary of crossing swords with the U.S. superpower, Beijing is obsessed with securing energy supplies for its resource-scarce economy, and Iran is a willing supplier.

The Iranian Mehr news agency reported last month that CNOOC signed a $16 billion agreement to develop the Northern Pars gas field and build a liquefied natural gas facilities. Dow Jones Newswires, however, quoted CNOOC spokesman, Liu Junshan, last month as saying that the company was still in talks with Iran on the project.

China’s two major oil companies – China Petrochemical Corp. and China National Petroleum Corp. – are either involved in gas projects in Iran or in talks to participate in development of gas resources.

Iran has seen the lure of its energy resources and other markets as a way to weaken the will of U.N. Security Council members to exact harsh punishment over its nuclear program, which Tehran claims is for peaceful purposes.

Chinese President Hu Jintao last week told Iran’s top nuclear envoy that Tehran should respond to the United Nations’ concerns but also called for a negotiated settlement of the dispute.

Meanwhile, China’s Foreign Ministry on Tuesday said U.S. sanctions imposed last month against three Chinese companies for alleged weapons trade with Iran and Syria were baseless and demanded they be lifted.

“We are strongly opposed to this and demand the U.S. side to correct its erroneous act,” ministry spokesman Liu Jianchao said at a regular press briefing.

The sanctions apply to China National Electronic Import-Export Company (CEIEC), China National Aero-Technology Import and Export Company (CATIC), and Zibo Chemet Equipment Company.

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