Iran Inks $2Bln Pars LNG Deal With Total, Petronas

Iran's National Iranian Oil Co. has signed a $2 billion deal with Total and Petronas, to form Pars LNG, a liquefied natural gas joint-venture, state-owned radio reported Wednesday.

Pars LNG, 50% owned by NIOC, will from 2009 produce 8 million metric tons a year of LNG for 25 years, the report said. Total will take a 30% stake in Pars LNG, with Petronas holding the remaining 20%.

The report said Rokneddin Javadi, managing director of NIOC, was at the signing ceremony for Pars LNG, which will use natural gas from Phase 11 of the development of Iran's huge South Pars gas field. no financial details were disclosed

Iran's tie-up with Total and Petronas follows Iran's signing last week for the $3 billion development of the massive Azadegan onshore oil field with a Japanese consortium in the face of disapproval from the U.S., which says Tehran is trying build nuclear weapons. That deal was signed under Iran's buyback system, which skirts the Iranian constitution's ban on foreign companies taking an equity stake in the country's energy sector.

Like the Japanese deal, Total and Petronas will enjoy a timeframe far in excess of previous buyback deals - much criticized by foreign investors - that were generally limited to seven or eight years.

BG Group, Shell and Repsol YPF are reportedly in talks to develop other South Pars LNG projects.