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(Adds Total comment in second paragragh)
DUBAI, July 2 (Reuters) - Iran plans to sign a new contract to develop its giant South Pars gas field with France's Total and China's CNPC on Monday, the first major Western energy investment since sanctions against Tehran were lifted, an Iranian oil ministry official told Reuters on Sunday.
A spokesman for Total confirmed the company will sign the contract to produce gas for the Iranian market from 2021, adding that the 20-year deal with will be the first Iranian Petroleum Contract (IPC) signed in Iran.
Total holds a 50.1 interest in the South Pars project with state-owned China National Petroleum Corporation owning 30 percent and Iran's Petropars 19.9 percent.
The offshore field was first developed in the 1990s and Total was one of the biggest investors in Iran until the international sanctions were imposed in 2006 over suspicions that Tehran was trying to develop nuclear arms.
Total has decided to return and develop Phase 11 of the South Pars project, which will cost up to $5 billion.
"The international contract for development of Phase 11 of South Pars in the framework of IPC (Iranian Petroleum Contract) will be signed on Monday, July 3, at 14:30, at a ceremony in Tehran attended by Iranian oil minister Zanganeh and senior officials from France’s Total, China’s CNPCI and Iran's Petropars," the Iranian oil ministry official said.
Total's Chief Executive Patrick Pouyanne told Reuters last month that the group would make an initial $1 billion investment after the United States extended sanctions relief under the 2015 agreement.
Iran, the third largest producer in the Organization of the Petroleum Exporting Countries, hopes its new IPC contracts will attract foreign companies and boost oil and gas production after years of under-investment.
The vast offshore gas field is shared between Iran and Qatar, where Total is also a major player in gas production as well as in oil and refining. Tehran calls the giant field South Pars while Doha calls it the North Field. (Reporting by Rania El Gamal; Additional reporting by Bate Felix in Paris; Editing by Andrew Torchia and Elaine Hardcastle)