China firm to export 278 trains to Iran-Xinhua

BEIJING, June 11 (Reuters) A state-owned Chinese equipment company has agreed to export 278 passenger trains worth 5 million to Iran to help ease transport bottlenecks in the country, the official Xinhua news agency said on Sunday.

The machinery unit of China's General Technology Group (Genertec) signed the deal on June 2, Xinhua cited unidentified sources from the State-owned Assets Supervision and Administration Commission as saying.

Iran faced a severe shortage of passenger railway equipment, Xinhua said.

Other areas of commercial cooperation between Iran and China have included energy.

Details of a deal worth up to million signed between Iran and China Oilfield Services Ltd to drill the waters of the Caspian Sea surfaced in January.

China has also been looking to buy liquefied natural gas from Iran after 2009 and develop the giant Yadavaran oilfield.

The five permanent members of the U.N. Security Council, which include China, along with Germany, have proposed a package of incentives and penalties to Iran aimed at persuading it to give up uranium enrichment, research the West believes could be used to make nuclear weapons.

If Iran sticks to its refusal to suspend uranium enrichment, Western powers could push for sanctions at the Security Council, action China has traditionally opposed.

REUTERS PV BST1806