Iran says it has discovered what it calls the world's largest onshore field of what is known as 'sweet' natural gas, with estimated reserves worth nearly $16bn.

The Iranian Oil Minister, Bijan Namdar-Zaganeh, said the gas would enter the Iranian national network in two years' time.

It is not yet known whether gas produced from the field is intended for domestic consumption or for export.

The new field confirms Iran as one of the top gas producing countries in the world, with the potential to step up exports.

Cheap to develop

The fact that it intends to seek foreign investment to help develop the field also confirms that President Khatami's reformist government is pushing ahead with proposals to open up Iran's newly liberalised economy to the outside world.

From the international oil industry's point of view, it is not the size of the field, but the type of gas it contains, which is causing excitement.

This one, which is a smaller field, produces sweet gas, which is very cheap to develop," said Vahe Petrossian of the Middle East Economic Digest.

In addition, it will produce liquid gas - about 25-30,000 barrels per day - which makes it again a very attractive proposition for any foreign investor because gas in liquid form can very easily be exported.

Tehran has been trying for years to boost its gas exports and reduce its dependence on oil.

But its been blocked by the high cost involved in developing gas fields and US sanctions against companies investing in its oil and gas industry.

With Washington's sanctions regime gradually being relaxed, and discoveries of more economical fields such as this, some oil experts now predict it may only be a few years before gas could become a major Iranian export.