France has still not reached a decision over its plans to invest in multibillion dollar LNG project in Iran, despite the Iranian minister warning the French prime minister that the project would go ahead without the support of French firm Total if a decision is not reached soon.
Under agreements signed in 2006, Total is to take charge of the exploitation of phase 11 of Iran’s giant South Pars gasfield with the intention of producing liquefied natural gas (LNG) for export as well as constructing a liquefaction plant.


Last week Iran’s minister of oil Gholam Hossein Nozari announced: “If Total does not come here, right here, the Pars LNG contracts will be handed over to capable Iranian hands for them to carry out.”


This announcement follows declarations made by new French president Nicolas Sarkozy that European states should take further measures outside of the constraints of current UN sanctions, against Iran in protest over its nuclear programme.


Sarkozy has asked for French and European companies such as Total and Gaz de France to leave Iran, and cease bidding on Iranian projects.


Pars LNG is Iran’s first LNG export terminal and will be supported by developing part of the giant South Pars gasfield. In 2004, the project was worth US$2bn, however costs have soared over the last three years. The terminal was due to start in 2009, but the deadline has now been extended to 2011.


Since the election of Sarkozy, France has significantly toughened its position towards Iran.
However this new stance has attracted strong criticism from Iran, with the French foreign minister Bernard Koucher being summoned to the Iranian foreign ministry to listen to Tehran’s complaints over France’s negative attitudes, and its attempts to push for further European sanctions against the country and an extension to UN security resolutions.