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Geithner to pressure China and Japan to back economic sanctions against Iran

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By Erik Wasson – 01/04/12 09:52 AM ET

Treasury Secretary Tim Geithner will travel to China and Japan next week to hold high-level economic talks, the Treasury Department announced Wednesday.

High on the agenda will be getting Chinese support for new sanctions against Iran, which is forging ahead with its plans to develop a nuclear weapon. Iran will also be a top priority in Japan.

President Obama last weekend signed harsh new U.S. sanctions into law as part of the 2012 defense authorization bill.

Tensions between the United States and Iran have ratcheted up in recent weeks as the new U.S. sanctions against Iran’s central bank were sent to Obama’s desk.

Iran has threatened to block shipping in the Persian Gulf in order to cause a spike in oil prices, in retaliation. China is one of the biggest customers for Iran’s oil and has shown reluctance to punish Tehran.

China’s foreign ministry on Wednesday criticized the new U.S. sanctions.

“China has always maintained that sanctions were not easing tensions, the Iranian nuclear issue has to be resolved in a fundamental way, that dialogue and negotiation is the only correct way,” spokesman Hong Lei said when asked about the U.S. law.

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“China is opposed to a country putting its domestic law above international law, by placing on the other countries unilateral sanctions.  Like many other countries, China and Iran maintained normal, open and transparent trade and energy exchanges, these transactions do not violate United Nations Security Council resolutions should not be affected.”

Geithner’s trip on Jan. 10 to 12 will start off with a meeting with Chinese Vice Premier Wang Qishan.

In a conciliatory gesture to China last week, Treasury once again decided not to name China a “currency manipulator,” despite acknowledging that the renminbi is undervalued.

The low value of China’s currency promotes China’s exports into the United States and hurts the ability of U.S. products to compete in China. A Senate-passed bill to slap trade sanctions on China over its currency has stalled in the House since October.

Geithner will meet with Prime Minister Yoshihiko Noda on his journey to Japan. Japan is contemplating trying to join the TransPacific Partnership trade agreement being negotiated by the Obama administration.

For such a TPP agreement to be completed, Congress would almost certainly need to renew fast-track trade negotiating authority for the president. That power would force up-or-down votes in Congress on any trade pact.

Source

U.S., again, talks of sanctioning Iran’s central bank

U.S., again, talks of sanctioning Iran’s central bank | Reuters.

Australia: BG Still Targets Mid-2012 to Sanction Third QCLNG Train

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Queensland’s recent heavy rains and floods could delay the expansion of BG Group’s $18 billion Queensland Curtis LNG plant at Gladstone because the British gas giant has been unable to shore up gas reserves as quickly as it had hoped.

Speaking to investors in London on Tuesday night, chief executive Frank Chapman said BG was still targeting a mid-2012 sanction of a third LNG production train at Gladstone.

But to do so, BG needed to drill its coal-seam gas ground to increase the level of confidence it had in the 21 trillion cubic feet of what it called gross gas resources and turn them into reserves.

The name of the game at the moment is the maturation of that reserves and resources base within that period,” Mr Chapman said.

That has suffered some impact because of the flooding and the impact that’s had on access to drilling sites, but we’re still focused on moving some of that prospective resource into a more, higher confidence level to underpin a third train.”

Despite the rains, BG was still on track for first LNG exports from Gladstone in 2014, he said.

BG was the first of three big CSG-to-LNG proponents planning exports out of Gladstone from 2014.

Of the other two, the Santos-led Gladstone LNG project has begun construction, while the Origin Energy-ConocoPhillip joint venture is still waiting for board approval of its project.

Mr Chapman joined the chorus of voices touting stronger LNG demand because of the Japanese earthquake and subsequent Fukushima nuclear disaster.

He said the flow-on effect was likely to be long-term. “After (the) Three Mile Island (1979 nuclear accident) in the US, we saw lead times for nuclear projects going out to something like 12 or 13 years, and associated with that will be increased costs associated with more stringent regulatory safety requirements,” he said.

All of this, I think will result in medium to long-term higher gas demand for power, and as a consequence, extra demand for LNG, and this is going to cause a further tightening of a market situation which we already regarded as quite tight.”

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