updated 2/17/2006 9:41:34 AM ET 2006-02-17T14:41:34

China and Iran are close to setting plans to develop Iran's Yadavaran oil field, according to published reports, in a multibillion-dollar deal that comes as Tehran faces the prospect of sanctions over its nuclear program.

The deal is thought potentially to be worth about $100 billion.

According to Caijing, a respected financial magazine, a Chinese government delegation is due to visit Iran as early as March to formally sign an agreement allowing China Petrochemical Corp., also known as Sinopec, to develop Yadavaran.

The Wall Street Journal also reported in Friday's editions that the two sides are trying to conclude the deal in coming weeks before potential sanctions are imposed on Iran for its nuclear ambitions. The report cited unnamed Iranian oil ministry officials familiar with the talks.

The deal would complete a memorandum of understanding signed in 2004.

In exchange for developing Yadavaran, one of Iran's largest onshore oil fields, China would agree to buy 10 million tons of liquefied natural gas a year for 25 years beginning in 2009, the Caijing report said, citing Sinopec board member Mou Shuling.

Chinese and Iranian officials in Beijing said they could not confirm the report.

"I know nothing about this. I can't answer your questions," said Ma Li, a spokeswoman for the National Development and Reform Commission, the planning agency in charge of China's energy and resources industries that Caijing said would dispatch officials to Iran.

Staff at Iran's embassy in Beijing said they were aware of the report but had not heard Mou's remarks, which Caijing said were made at a recent embassy event.

A written statement from the Iranian Embassy noted that the two countries have been working together in various energy fields, "following the rule of mutual benefits and respect in all bilateral cooperation."

Calls to Sinopec's headquarters were not answered late Friday.

The Caijing report said Chinese and Iranian officials met in December for talks on the project. It cited Mou as saying the two governments and companies involved were moving ahead with the deal despite the controversy over Iran's nuclear program.

According to the Caijing report, Sinopec would hold a 51 percent stake in the Yadavaran project, with India's Oil and Natural Gas Corp., or ONGC, taking 29 percent. The remainder would go to Iranian companies and possibly to Royal Dutch Shell PLC, which has also expressed interest, it said.

The report said there was some disagreement over intended capacity, with Iran asking China to agree to daily output of 300,000 barrels of oil, while Sinopec preferred to set a target of 180,000 to avoid excess production.

Sinopec, Asia's largest refiner, has shares traded in New York, London, Hong Kong and Shanghai.

China, seeking oil and gas to fuel its booming economy amid stagnant production at home, has been snapping up energy resources in places as far flung as Venezuela, Kazakhstan, Nigeria and Australia. Its investments in Iran and Sudan have prompted complaints it is undermining diplomatic efforts to bring recalcitrant regimes in line.

Beijing has strongly urged that a diplomatic solution be found to the impasse over Iran's nuclear program.

Western nations fear that Iran plans to develop nuclear weapons, but Iran insists its intentions are purely for generating electricity. Growing international concern about its aims contributed to Tehran being reported to the U.N. Security Council by the 35-nation board of the International Atomic Energy Agency, the U.N.'s nuclear watchdog.

On Thursday, France's foreign minister, Philippe Douste-Blazy, accused Iran of secretly making nuclear weapons.

The Security Council is due to consider Iran's nuclear activities next month. The council has the power to impose economic and political sanctions on Iran, but members China and Russia could exercise their veto power against such measures.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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