TEHRAN: Iran has suspended a $16 billion gas field contract with China in the Gulf to push it to meet its obligations in another nearby field that is already being tapped by Qatar, the Mehr news agency reported on Tuesday.

It quoted the managing director of the Pars Oil and Gas Co, Moussa Souri, as saying “the development contract for North Pars (field) with the Chinese is temporarily suspended.” Souri explained: “Right now, the priority is developing the shared oil and gas fields, especially South Pars.”

He added that Iran's decision to let the Chinese develop the North Pars field “hinges on their activities in the development of South Pars' Phase 11.”

The two are located in the Gulf. South Pars straddles the maritime border with Qatar, which has been extracting gas from it for the past decade.

The Pars Oil and Gas Co said last week that development of Phase 11 of the South Pars field in the Gulf was only 10 per cent complete, instead of the scheduled 17 per cent, because the Chinese -- who had signed a $5 billion contract in 2009 for the zone -- had not started their promised work there.

Phase 11 is important because Iran plans to use it to fill its first-ever liquefied natural gas plant being built on its Gulf coast.—AFP