Chinese Company Signs Huge Gas Deal With Iran
A Chinese company has signed a prelimary agreement with
Iran to buy US$20 billion of liquefied natural gas (LNG)
from Iran over the next 25 years. The deal calls for Zhuhai
Zhenrong Corp. to buy 2.5 million metric tons annually,
beginning in 2008.
In order to meet the needs of the rapidly growing Chinese
consumer and industrial economy, Chinese companies have
been aggressively making deals for energy sources and
exploration worldwide. In recent months, Chinese president
Hu Jintao visited
Gabon in Africa after first visiting France, which
owns Total Gabon, the main oil exploration company in
the African country. In early March, Sinopec, one of China's
leading energy firms, signed a deal
with Saudi Arabia to develop natural gas reserves
in the Middle East kingdom.
Although China has some natural gas reserves, they are
insufficient to meet the country's growing domestic needs.
As tensions between the US and the Mid-east have increased
over the war in Iraq, countries in the region have sought
to diversify from the US as their major customer. The
feeling is mutual, as the US government has come under
domestic pressure to diversify from Mid-east energy sources.
For the Mid-east countries which are largely dependent
on energy exports, China's entry as a leading customer
has been welcomed. However, the US does not welcome the
entry, preferring instead that the empty seat at the table
left by the US departure remain unfilled. However, China's
energy needs are so great that it has ignored American
requests to stay out of the market.
Now, Beijing has become a regular stop for Mid-east and
South American oil ministers.
Zhuhai Zhenrong Corp., the gas importer, is a subsidiary
of Norinco (China North Industries Corp.), a major weapons
manufacturer which has close ties with the PLA (Peoples'
Liberation Army).
China has a Muslim population of approximately 70 million,
which are heavily conentrated in the northwestern part
of the country, but are also present throughout its main
cities. They live peacefully with the rest of the population
and participate in all parts of Chinese society, where
they have had a presence for nearly 1,000 years.
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