China occupies West’s place in Iranian market

Azerbaijan, Baku, Feb.8 /. Trend D.Khatinoglu /

China is not interested in joining the sanctions imposed by the UN Security Council and directly by the West against Iran, especially in the current discussions over new sanctions. The main reason lies in China's economic interests in Iran. Recently, the size of the Chinese investment in various countries, including Iran, has increased.

The China -Iran economic cooperation is at a high level, particularly in the energy sector. Presently, Iran sells to China about 448,000 barrels of oil per day.

Iranian-Chinese Commerce Chamber Head Asgar Oldai said trade turnover between Iran and China hits $29 billion. Thus, China occupies place of the first economic partner of Iran.

Iran exports to China, mainly commodities, including oil, leather, iron ore, aluminum, sulfur, flowers, etc. Some 60 percent of the total turnover volume worth $29 billion fells to the Iranian exports and 40 percent -the Chinese imports.

Jan.30 U.S. Secretary of State Hillary Clinton said that  it is necessary to exert pressure on China to vote for the new UN sanctions against Iran. However, given the extensive economic cooperation between China and Iran, it becomes clear that Beijing has no interest in imposing new sanctions on Iran.

In connection with yearly increasing need for energy, China has substantially increased investment in oil and gas sector of countries with hydrocarbons reserves, including the Middle East and Central Asia countries. In this sense, China's participation in Iran's oil and gas projects attracts particular  attention.

Based on the Chinese State Customs Authority's official information, in 2009 the country imported 204 million tons of oil. Iran is the second top oil exporter to China after Saudi Arabia.

Today, the Chinese companies occupies the Western companies' place, retiring from the energy projects of Iran because of the UN Security Council's sanctions.

The 11th phase of the Iranian South Pars gas project may be cited as an example. Following the French company Total's refuse to participate in this phase China's state oil company CNPC took its place in the project.

Based on the statistics provided by the Iranian Shana agency (Agency for Petroleum and Energy), as of today volume of China's participation in Iran's oil and gas sector amounted to $ 50 billion and 35-40 percent of the funds spent on various projects.

China's participation in the Iranian oil and gas projects:

The South Azadegan field

Based on the contract signed between the National Iranian Oil Company of Iran (NIOC) and the Chinese National Petrol Company (CNCP), Beijing will provide 90 percent funding for the development of this field. Currently, 90 percent of the project belongs NIOC and 10 percent - the Japanese company İnpex.

Under the contract, CNCP has acquired 70 percent of Iran's share in the project and will finance the remaining 20-percent share of Iran. The Azadegan field was  discovered in 2000 and has reserves of 42 billion barrels of oil. It is expected to receive 150,000 tons bpd in the first phase of the project  and in the second phase - 110,000 bpd. The project cost is estimated at $2.5 billion.

The North Azadegan field

This project costs presumably $2 billion. CNCP has signed a contract with Iran on this project. It is expected to receive 72,000 tons bpd in the first phase of the project  and in the second phase - 75,000 bpd.

The Yadavaran field

In 2007, Iran  and the Chinese company SINOPEC signed a contract to develop the Yadavaran field, valued at $2billion. Under the project, it is expected to increase the production to 20,000 bpd in two years, with a further increase to 85,000 bpd.

Development of the South Pars project's 11th phase

NICO and CNPC signed a contract to develop 11th-phase of the South Pars project worth $4.7 billion. Nine years ago this project was transferred to the French company Total.

As Total refused to take part in the project due to the international sanctions against Iran, this project was transferred to China. The 11 phase of the project envisages daily production of 50 million cubic meters of natural gas.

The North Pars filed 

Iran and China have also signed the agreement on the North Pars field with estimated value of $ 16 billion. In January 2009, the two countries signed a contract on development of the project's first stage worth $2 billion.  The project covers12 years. This project will be implemented in four phases and it is expected to produce about 35 million cubic meters of gas per day at each phase. Based on the  Shana agency, the field's alleged reserves amount to 58.9 trillion cubic feet. The Chinese company CNOOC signed a contact on this project with Iran in 2006.

The contract on LNG

At present, CNPC holds discussion on purchase of liquefied natural gas (LNG) worth $3.6 billions from Iran. LNG will be provided from the 14th phases of the Iranian South Pars project. The company is also in discussions about the development of oil and gas in the sea territory of Iran in the Caspian Sea.

Petrol business between Iran and China

Based on the contract on gasoline import gasoline signed with China and Venezuela, Iran receives daily 11 million liters of the 22 million daily imports.

That is, Iran provides 50 percent of gasoline imports through these two countries.

Currently, Iran daily domestic demand in gasoline is 67 million liters, 22 million (120,000 barrels) of which is imported from abroad.

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