U.S. trade officials said today they are reviewing a lawmaker's request for the U.S. to cut off free trade talks with Malaysia over a $16 billion energy development deal with Iran.

House of Representatives Foreign Affairs Committee chairman Tom Lantos, a California Democrat, raised concerns over the deal signed last month between Malaysia's SKS and the state-owned National Iranian Oil Company.

"This is a disturbing development that I believe requires swift action by the administration," Lantos said in a letter yesterday to U.S. Trade Representative Susan Schwab.

"I therefore request that your office formally suspend all FTA (Free Trade Agreement) negotiations with the Government of Malaysia until and unless the Government of Malaysia ensures that the SKS agreement with Iran is canceled," Lantos said.

The Iranian oil company and SKS signed the $16 billion preliminary deal to develop Iran's southern Golshan and Ferdos gas fields and build plants to produce liquefied natural gas, Iranian state television reported on 7 January.

Lantos said the deal potentially requires the U.S. to penalize SKS under the recently expanded Iran Sanctions Act, which calls for steps against companies involved in Iranian energy development.

U.S. Trade Representative spokesman Steve Norton told Reuters trade officials were reviewing Lantos' letter.

Gholamhossein Nozari, managing director of the National Iranian Oil Company, told Mehr news agency last month the southern gas fields’ project would take 25 years to complete. He also said SKS would have a 50% share of the produced liquefied natural gas.

U.S. lawmakers have also raised concerns about a preliminary deal Anglo-Dutch super major Shell and Spain's Respol YPF have signed to develop part of Iran's giant South Pars gas field.

(source : Upstream)