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See more Images of April Follow Reuters Facebook Twitter RSS YouTube Read Image shows buildings gone at Iran site: diplomats 4:05am EDT Romney's birth certificate evokes his father's controversy 29 May 2012 What Are 'Bath Salts' And Are They Illegal? 30 May 2012 Gunman kills 5 people and himself in Seattle rampage 1:45am EDT Spain cries for help: is Berlin listening ? 30 May 2012 Discussed 152 Romney tells vets dangerous world demands powerful military 152 Obama honors Dylan, other ”heroes” for cultural impact 146 Romney’s birth certificate evokes his father’s controversy Watched A look at the UK’s most beautiful face Thu, May 10 2012 Usurped by kiteboarding, sun sets on Olympic windsurfers Wed, May 30 2012 Cruise ship crunch Sat, May 26 2012 Iran cancels $2 billion dam deal with China: report Tweet Share this Email Print Related News Iran cancels $2 bln dam deal with China - report 12:04am EDT Oil edges up on Iran, but posts fourth weekly loss Fri, May 25 2012 Iran, big powers agree to hold more nuclear talks in June Thu, May 24 2012 WRAPUP 5-Iran, big powers agree to meet again over nuclear dispute Thu, May 24 2012 Oil up as Iran talks extended, eyes weak data Thu, May 24 2012 Analysis & Opinion USA Todayâ€™s oily, gassy rainbow China doesn’t need a policy U-turn Related Topics World » China » BEIJING | Thu May 31, 2012 2:27am EDT BEIJING (Reuters) - Iran has cancelled a $2 billion contract for a Chinese firm to help build a hydroelectric dam in the country, Chinese state media said on Thursday, a move that risks upsetting Beijing, one of Tehran's most important economic and political allies. Iranian President Mahmoud Ahmadinejad is due to visit China next week for a security summit, where he is expected to hold talks with his Chinese counterpart, Hu Jintao, on Iran's disputed nuclear programme. In March 2011, Iran's official IRNA news agency said China's Sinohydro Corp. had signed a contract with Iranian hydro firm Farab to build the dam, described as the world's tallest, in Iran's western province of Lorestan. It was designed to support a 1,500-megawatt power station. The Global Times, a popular tabloid owned by Chinese Communist Party mouthpiece the People's Daily, said the Iranian government had decided to cancel the contract. The report did not cite sources or give a reason for the cancellation. But it quoted Iranian media reports as saying Iran's central bank was "dissatisfied" with financing options offered by China. Sinohydro was not immediately available for comment. Guo Xian'gang, vice president of the China Institute of International Studies, a government think tank, said he did not see the cancellation affecting Sino-Iran ties. "Some projects may be cancelled due to some technical reasons, other projects are still going on, it is really normal," Guo said. "T he outside world does not need to exaggerate this." Guo, who is an expert on the Middle East, added the cancellation would not affect Ahmadinejad's visit to China. China and Iran have close energy and trade ties, and Beijing has repeatedly resisted U.S.-led demands to impose tougher economic sanctions on Iran to curb its nuclear ambitions. However, differences have arisen between China and Iran in the development of Iran's oil and gas resources. State-owned China National Petroleum Corporation was given a month's deadline by Iranian Oil minister Rostam Ghasemi in April to make a serious start on the giant South Pars gas field after 32 months of delay. In September last year, Reuters reported China's reluctance to progress with oil and gas investments in Iran. Many foreign companies have been forced to pull out of the Iranian energy sector due to the fear of sanctions, but state-owned Asian firms are less susceptible to Western pressure to stay away from the Iranian market. (Reporting by Sui-Lee Wee, Jim Bai and Huang Yan,; Editing by Mark Bendeich and Jeremy Laurence) World China Related Quotes and News Company Price Related News Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. 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