LONDON – Syria has prepared to cancel an award to a U.S.-Canadian consortium for the development and production of natural gas.

The London-based Al Hayat daily reported on Monday that the Syrian government has demanded guarantees that the consortium would not stop the $700 million project under pressure from the United States. The Bush administration has been mulling sanctions that could block U.S. investment in Syria's energy sector.

In early 2004, the Syrian Oil Ministry awarded a consortium headed by the U.S. firm Occidental a project to develop natural gas reserves in central Syria. Weeks later, President George Bush signed the Syrian Accountability Act, which imposed fresh sanctions on Damascus, but did not threaten the project.

Al Hayat said Syria has demanded guarantees of at least 300 million euros to guarantee the continuation of the Occidental-led project. The newspaper said the government has examined the prospect of transferring the project to the state-owned Syrian Gas. Co.