Baku, Azerbaijan, May 17
Iran’s Oil Minister Bijan Namdar Zanganeh said that if France’s Total withdraws from the project to develop 11th phase of South Pars gas field, Chinese National Petroleum Corporation (CNPC) will replace it.
Under the contract’s term, CNPC will take Total’s shares in the project if the French company pulls out of the contract, Zanganeh said, Iran’s media outlets reported.
Zanganeh’s statement came after the French energy giant said that is preparing to pull out of the gas project in the face of renewed US sanctions.
“Total will not continue the SP11 (South Pars 11) project and will have to unwind all related operations before 4 November 2018, unless Total is granted a specific project waiver by US authorities with the support of the French and European authorities," the company said in a statement.
Last week, The US announced re-imposing strict sanctions on Iran, which were lifted in 2016 under the nuclear deal reached between Tehran and the six world powers.
Zanganeh said that Total will not face any fine if it withdraws, but the investment it has so far made in the project will not be repaid until full implementation of the project.
The French company’s deal with Iran was the first major Western energy investment in the Islamic Republic since sanctions related to Iran’s nuclear power program were lifted.
Under the contract Total will be the operator with a 50.1 percent stake, alongside Chinese CNPC with 30 percent and Petropars, a subsidiary of National Iranian Oil Co., with 19.9 percent.
The project will have a production capacity of 56 million cubic meters of gas per day. The produced gas will be supplied to the Iranian domestic market, starting in 2021.