TEHRAN – Iran and China have updated a 25-year deal signed first in 2016that foresees $400 billion of Chinese investment in the resource-richMiddle Eastern nation, well-regarded energy industry publication thePetroleum Economist reports.
The update came during a visit at the end of August by Iranian ForeignMinister Mohammad Javad Zarif to Beijing where his Chinese counterpartState Councilor Wang Yi called the two countries as “comprehensivestrategic partners”, Press TV has reported.
According to the Petroleum Economist, the deal represents “a potentiallymaterial shift to the global balance of the oil and gas sector” and couldmark a “seismic shift in the global hydrocarbons sector” where no USdollars will be involved in commodity transaction payments.
Investment in oil, gas, petchems projects
“The central pillar of the new deal is that China will invest $280 billion,developing Iran’s oil, gas and petrochemicals sectors,” said the monthlymagazine which spoke to “a senior source closely connected to Iran’sPetroleum Ministry” during Zarif’s visit.
This amount may be front-loaded into the first five-year period of the dealbut the understanding is that further amounts will be available in everysubsequent five-year period, subject to both parties’ agreement, it said.
“There will be another $120 billion investment in upgrading Iran’stransport and manufacturing infrastructure, which again can be front-loadedinto the first five-year period and added to in each subsequent periodshould both parties agree,” it added.
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The Petroleum Economist has been a respected energy industry publicationfor decades, better known for its sophisticated analysis.
Its report follows another story last month that China had “re-engaged”Iran on three key energy projects, namely Phase 11 of the supergiant SouthPars gas field, West Karoun oil fields and the Jask oil export terminal.
State-owned China National Petroleum Corporation (CNPC), one of thecountry’s “big three” producers, holds an 80% stake in Phase 11 afterFrench major Total’s withdrawal in August 2018 in response to US sanctions.
CNPC had since made little progress in developing the flagship project, butit has agreed to step up the pace on its development after getting a 30%discount to the global market price on potential condensate and LNGexports, the Petroleum Economist said.
China has also agreed to increase production from Iran’s West Karoun oilfields—including North Azadegan, operated by CNPC, and Yadavaran, operatedby fellow “big three” firm Sinopec—by an additional 500,000 barrels per dayby the end of 2020
