China's leading offshore oil and gas company, CNOOC, kept silent Thursday on reports it has clinched a $16 billion agreement to develop Iran's North Pars gas field, while a government spokesman said the project should be viewed strictly as a commercial affair. If the deal goes through, it will be the second big oil and gas contract with Iran for energy-scarce China in several months, following a $2 billion agreement by Chinese oil refiner Sinopec to develop the Yadavaran oil field. Beijing has defended its growing business ties with Iran against criticism by the United States, which is pushing for China and others to abide by United Nations sanctions aimed at pressuring Iran to rein in its nuclear program. "Cooperation between CNOOC and Iran is a busines act between enterprises," Foreign Ministry spokesman Liu Jianchao told reporters Thursday in a routine briefing. "We believe that the actions to address this problem should not undermine normal trade and economic cooperation with Iran," Liu said. State-owned China National Offshore Oil Corp., did not respond to phone calls or emails about the deal. The Iranian oil ministry's official Shana Web site said a signing ceremony was planned for Wednesday, but by late Thursday there was no announcement that the signing had occurred in either the Iranian or Chinese press. Shana says the agreement calls for CNOOC to invest US$5 billion in upstream gas field projects and US$11 billion in downstream liquefied natural gas plants. The deal was first announced in 2006. The North Pars field is believe to contain 80 trillion cubic feet (2.3 trillion cubic meters) of gas. The agreement is expected to supply CNOOC with liquified natural gas for three new terminals it is building to help meet burgeoning demand in China's booming eastern and southern regions. Shares in CNOOC Ltd., the company's publicly traded unit, fell 0.4 percent to 13.44 Hong Kong dollars Thursday. In Washington, State Department spokesman Thomas Casey said the State and Treasury departments would likely look into whether the deal breaches the US sanctions law. As a company with shares listed on the New York Stock Exchange, CNOOC Ltd. would be subject to that law. "As a matter of general policy, we don't believe now is the time to be making new investments in Iran, whether that's in the energy sector or in anything else," Casey said at press briefing Wednesday. "There is specific legislation that does cover and potentially sanction investments made in Iran's oil and gas sector," Casey said. The announcement of a preliminary deal on the North Pars gas field in 2006 prompted Washington to demand an explanation, and a warning that such a contract might trigger penalties under the sanctions law. Iran has trumpeted recent energy deals as a vindication against US efforts to isolate Tehran. In December, Malaysia signed a $16 billion agreement with Iran's Pars Oil and Gas Co. to develop the Golshan and Ferdows gas fields. Friction over that deal has complicated US talks with Malaysia over a free trade agreement. Despite its qualms over sanctions, China has joined the four other veto-wielding permanent members of the UN Security Council in supporting a draft resolution approving new sanctions against Iran for refusing to suspend uranium enrichment. That resolution would ban trade with Iran in goods which have both civilian and military uses, introduce financial monitoring on two banks and call on all countries "to exercise vigilance" in granting export credits, guarantees or insurance.