Oil majors Royal Dutch Shell Plc and Spain's Repsol are preparing to pull out of a $10 billion natural gas project following pressure from the US government, Spanish media reported.

Shell and Repsol will also help Iran find new partners for the project, including Russia's Gazprom, Indian Oil Corp and Chinese companies, the reports said.

The two companies, currently negotiating with the Iranian authorities to drop their current development plans for block 14 of the South Pars field, want the Iranian government to allow them to bid for other parts of the field in the future once the international political climate improves, the reports said.

Shell and Repsol may sell their 50 per cent interest in bloc 14. The rest of the shares are held by the National Iranian Oil Company (NIOC). But they want to keep their interest in blocs 23 and 24. 

Shell and Repsol had planned to export liquefied gas from the South Pars field as part of the 'Persian LNG project'. It is now likely that the gas will be suppled to the Iranian market or be exported by the Iran-Pakistan-India pipeline.

The European firms have until the end of May to tell Iran whether they are ready to take part in the $10 billion project.

The two companies could face US sanctions, already imposed on Iran, if they continue with the project.

Iran, meanwhile, denied issuing any ultimatums to Total and Shell over the development of South Pars gas-field.

"Iran has issued no ultimatum to Total and Shell on the development of offshore South Pars gas field," Mehr News Agency quoted Iran's oil minister Nozari as saying.

"The presence of these companies in phases 11 and 13 of South Pars is continuing as per schedule," he said.

"The West has been reporting that Iran was in the process of expelling Total and Shell ... In fact, no ultimatum has been issued to them," he added.

South Pars is one the world's biggest gas-fields, extending across an offshore area in the Persian Gulf shared by Iran and Qatar. According to Iran's Pars Special Economic Energy Zone, the field contains nearly 48 per cent of the country's confirmed reserves.

Iran possesses the world's second-largest gas reserves after Russia.