A Chinese company has signed a preliminary agreement with Iran to buy US$20 billion worth of liquefied natural gas over 25 years in one of the biggest deals of its kind, a newspaper reported Friday.  

The deal adds to massive Chinese efforts in recent years to secure new energy supplies both at home and abroad to feed its surging economy.

The agreement with Iran calls for Zhuhai Zhenrong Corp. to buy 2.5 million metric tons of natural gas annually from Iran beginning in 2008, The Asian Wall Street Journal said.

It comes two years after China signed deals worth a total of US$21.5 billion to buy gas from Australia and Indonesia.

China is stepping up its use of cleaner natural gas though the country has abundant coal supplies.

Public buses and some taxis have been converted to burn liquefied natural gas.

A Chinese-led consortium also is building a 3,900-kilometer-long (2,500-mile-long) pipeline to carry gas from the remote northwest Xinjiang Uygur Autonomous Region to Shanghai, the country's commercial capital.

Zhenrong also is expected to complete deals soon to develop three Iranian oil fields, the newspaper reported.

Zhenrong imported 12.4 million tons of crude oil from Iran last year, according to the newspaper.

(China Daily March 20, 2004)