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Iran and China have signed a memorandum of understanding (MoU) to award the project to develop Yadavaran oilfield to China’s Sinopec.

Under the MoU, Sinopec has agreed in return for the Yadavaran project to purchase an annual 10mn tons of Iranian liquefied natural gas (LNG) over a period of 25 years.

Sinopec will be commissioned to prepare a master development plan (MDP) for Yadavaran in cooperation with “creditable “international oil corporations.

The MDP will be implemented through buy-back scheme once approved by the National Iranian Oil Company (NIOC).

Also, NIOC has agreed to sell as much as 150,000 barrels per day (bpd) of crude oil to China at market prices over a period of 25 years once Yadavaran is in full swing.

 According to the MoU, Iran and China have voiced interest to strengthen their amicable relations, and have stressed determination to promote mutual cooperation in areas such as oil, gas and petrochemicals.

 Iran and China have also stressed that cooperation in the field of oil, gas and petrochemical industries are complementary to one another, and have called for the expansion of long-term relations in the energy sector.

The countries have also decided to form a joint oil and gas committee to follow up strategic cooperation in the area of energy.

Besides, the two sides have announced their support for joint investment in construction of an LNG refinery in Iran.

Cooperation on oil exploration projects in Iran and promoting consumption of condensed natural gas (CNG) in automobiles are other items included in the MoU.