Iran protests. Photo by .faramarz: Flickr

In the days before massive protests flooded the streets of Tehran, Iranian energy officials finalized a deal with China and moved closer to a final agreement with Pakistan that could hasten the development of the country’s massive gas reserves.

Earlier this month, National Iranian Oil Company’s managing director, Seifollah Jashnsaz, announced a $4.7 billion contract with China National Petroleum Corporation to develop the upstream portion of phase 11 of South Pars, Iran’s portion of the world’s biggest gas field shared with Qatar. The phase, one of at least two dozen, will eventually produce 70 billion cubic feet per day and 70,000 barrels of gas condensates. CNPC will reportedly operate phase 11, although it’s unclear with what stake.

By teaming with CNPC, Tehran effectively overwrote a memorandum of understanding with French major Total that had negotiated a 40 percent stake and operating control of the project also known as Pars LNG, which was originally conceived to produce 10 million tons of liquefied natural gas from the field. It’s unclear what, if any, role CNPC would play in developing the LNG portion. “NIOC decided to choose another partner due to Total’s delay in preceding the project,” a company statement said, adding it had given the French company “an ultimatum six month ago.”

The Iranian Oil Ministry’s official energy news wire service said that CNPC would begin work on phase 11 this month, adding there was nothing preventing Total from to still playing a role in the project if it so chooses. Last month, Iran announced it would issue $12.3 billion of foreign currency and rial-denominated bonds to develop South Pars, which NIOC estimates will require investment of about $50 billion.

Total has said it will have a part in the project, but it wouldn’t clarify how. But it is unlikely the French company would get involved in the more politically sensitive downstream LNG portion, without a significant stake in the more profitable upstream part.

Iran’s ability to successfully find a replacement for Total, even if just in the upstream portion, is significant because it shows China’s willingness to defy Western pressure over Iran’s nuclear program. That is likely to attract other foreign, non-Western players who are willing to risk taking cover under much larger Chinese companies. It also shows Tehran is serious about its previously announced intentions to move without initial Western expertise to develop its gas fields, whether it’s for internal use or to export via pipeline.

A few days after NIOC announced the deal with CNPC, Petronas’ chief executive, Mohd Hassan Marican, said the Malaysian company was reviewing the new role it would play with CNPC. It originally negotiated the remaining 10 percent share in the Total deal, although it’s unclear how the terms will change.

Another instance illustrating Tehran’s new teeth was the announcement in the aftermath of the CNPC contract signing that Royal Dutch Shell and Spanish Repsol had submitted a new proposal to begin gas production in Persian LNG, a project initially conceived to produce 25 million tons LNG in which each company has 25 percent. Both companies had a May 20 ultimatums to firm up commitments, according to Oil Minister Gholam-Hossein Nozari.

In addition to the Chinese deal, Tehran is finalizing a deal that will allow the export of about 1 billion cubic feet of gas per day to Pakistan. India, which was also supposed to be a partner in the original Iran-Pakistan-India “Peace” pipeline, has not agreed to the much-delayed project, which has been talked about for nearly two decades. Thus, while the US continues its efforts to isolate Iran, the Pakistanis are looking out for their own interests. The new Iranian gas could allow Pakistan to increase its gas consumption by about 27%. That gas could help Pakistan further expand its fleet of natural gas-fueled vehicles. Pakistan has the world’s largest fleet of NGVs, and some 25% of all the motor vehicles in the country are fueled with natural gas.

And even as the protests against the Iranian regime continue, other possible deals are looming. Iran is pursuing a deal with Turkey for a separate pipeline that could eventually supply parts of southern Europe.