China's National Petroleum Corp. has bowed out of a $5 billion natural gas project in Iran.
On Sunday, Iran's minister of petroleum announced CNPC's withdrawal from the agreement, which was created to help develop Tehran's massive South Pars natural gas field. Iran needs the development to help supply gas for its power plants.
The move comes as tensions between Iran and the U.S. continue to escalate. Energy companies have been hesitant to work with Iran since Washington reimposed sanctions on Tehran in response to its nuclear and ballistic weapons program.
And amid that pressure, CNPC officials have reportedly said the company was having issues finding ways to send money to Iran.
The Chinese state-run company became the project's main investor after France's Total SA pulled out last year. Iran says the country's Petropars Ltd. will now handle the project alone.
