DOHA (MARKETWATCH) -- Iran doesn’t agree with Total’s $10 billion cost estimate for the Pars liquefied natural gas development, and is still in negotiations with the company over the future of the project, Iran’s oil minister said Monday.

"The proposal by Total concerning the costs...wasn’t in line with our expectations. We have given our views and they are reconsidering their position," Kazem Vaziri-Hamaneh told reporters, speaking through an interpreter on the sidelines of the Gas Exporting Countries Forum meeting in Doha, Qatar.

Total Chief Executive Christophe de Margerie said last week the planned Pars gas liquefaction plant, which would be Iran’s first LNG export facility, might not go ahead owing to rocketing costs that he estimated at $10 billion.

Vaziri-Hamaneh said Iran has come to an understanding and an agreement with Royal Dutch Shell PLC and Repsol YPF (REP) over $10 billion agreement with the Iranian government to develop two additional areas of the huge South Pars natural gas field. He didn’t elaborate on the terms of the agreement.

High political tensions with the West over Iran’s nuclear program and the possibility of tougher United Nations sanctions aren’t a threat to the future of LNG development in Iran, he said.

Vaziri-Hamaneh added that Iran has already begun development of its own LNG facilities, and has also signed memorandum of understanding with China and Malaysia over separate developments of the North Pars field.

Iran has the world’s second largest reserves of gas, after Russia, but its industry is struggling to meet domestic demand and export commitments due to a long period of under investment. Since 2005, Iran has been a net importer of gas.

LNG developments on the huge South Pars field, offshore in the Persian Gulf, are seen as key to making Iran a gas exporter again, but rapidly increasing costs in hydrocarbon projects all over the world, threaten developments.