Iran will hold talks with China next month to finalize a $16 billion gas agreement despite a U.S. warning that the Chinese partner could become subject to sanctions, an official said Jan. 11

"We start talks with the Chinese on North Pars gas field in February," said Akbar Torkan, the managing director of Pars Oil and Gas Company -- which is in charge of the project.

Iran and China's biggest offshore oil producer, CNOOC, announced having signed on 21 December a preliminary deal to develop Iran's offshore North Pars gas field located in Gulf waters. Days later, a U.S. congressional committee was set up to review the deal to determine if U.S. sanctions should be slapped on CNOOC.

"Specifically, we will examine whether this agreement activates U.S. law requiring sanctions against companies involved in Iranian energy development, as is potentially the case here," Congressman Tom Lantos said in a statement at the time.

Under the deal, the two parties will work on developing the North Pars gas field for the production of liquefied natural gas, with each party taking 50% of any gas recovered. The investment, however, will come from the Chinese side: $5 billion or exploration and production, and $11 billion for downstream activities.

China's booming economy is forcing the country into a global search for energy resources to secure its future growth, and Iran, with its rich gas and oil fields, is one target.