TEHRAN, Dec 21: Iran and China's biggest offshore oil producer, CNOOC, have signed a memorandum of understanding worth more than $16 billion to develop a giant natural gas field, the Fars news agency reported Thursday.

The deal is aimed at developing Iran's northern Pars gas field and build plants to produce LNG (Liquefied Natural Gas).

“The agreement to develop the northern Pars gas field was signed with Chinese firm CNOOC, this contract involves a $16 billion investment,” the report from the semi-official agency said.

It said the project will be developed in four phases, with each party taking 50 per cent of the produced LNG.

The investment, however, will come from the Chinese side. The upstream investment to explore and produce the gas comes to $5 billion while the downstream investment for the plants is $11 billion.

“The development of the field will take eight years to complete,” the report said, adding that the field is estimated to be holding 80 trillion cubic feet (2.26 trillion cubic metres) and has the capacity to produce 431 million cubic feet of gas per day. —AFP