"We are discussing with regard to our participation in the LNG plant," the spokesman told Reuters, responding to reports that Petronas was in talks with French oil major Total SA over the Malaysian firm's wish to exit the project. He did not elaborate. The cost of the LNG plant, to use gas from block 11 of the South Pars field, was estimated at $2 billion last December. Total and Petronas hold respectively 60 and 40 percent in the partnership looking to develop block 11. The two have also formed a production company, Pars LNG, half owned by state oil firm National Iranian Oil Company (NIOC), with Total holding a 30 percent share, and Petronas 20 percent. Petronas declined to discuss details of its intentions over the LNG project, but said it was still committed to the upstream development of gas in block 11. "We are still committed to that," the spokesman said. Asked if Petronas' move to reconsider its participation in the LNG project was linked to worries over investment in Iran because of US sanctions, the spokesman said: "It's totally on commercial reasons." He declined to comment when asked if the company was looking to withdraw from the LNG project or to alter its level of participation. "For the details of that, it will not be fair to discuss with any people other than our partners," he said. Under U.S. sanctions, Washington can take measures against companies that invest in Iran, which has almost a tenth of the world's oil reserves. While US oil majors are absent from Iran, many European companies such as Royal Dutch/Shell and Total are engaged in projects there. But European oil major BP Plc. had said it was impractical for the company to do business in Iran due to BP's large operations in the United States. Washington accuses Iran of developing nuclear arms and backing terrorism. Iran denies the charges. Total in December concluded a framework deal with Iran allowing for a decision to go ahead with the Pars LNG project by early 2006. This agreement aimed to enable the start of engineering studies in 2005, which should have allowed a decision to launch the project at the end of 2005 or early 2006. The project will initially involve building two units that will each produce 5 million tons a year of LNG, gas which is cooled into liquid form so it can be transported by tanker. Iran is seeking to kick-start its LNG business as the Islamic Republic has the world's second-largest reserves of natural gas, but lags behind in building LNG facilities. PIN/Reuters