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SEOUL July 1 (Reuters) - South Korea's GS Engineering & Construction (GS E&C) (006360.KS: Quote) said on Thursday that it has called off a 1.42 trillion won ($1.2 billion) gas project in Iran following sanctions on the Middle East nation.

The company said in a filing to a regulatory agency that it it had cancelled on Wednesday the contract to sweeten gas from the South Pars field in Iran, signed with the Pars Oil and Gas Company (POGC) last October.

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The White House on Wednesday said U.S. President Barack Obama would sign into law tough new sanctions targeting Iran's energy and banking sectors.

In a move to pressure Iran into curbing its nuclear programme, the House of Representatives and the Senate approved a new sanctions bill last week that penalises companies supplying Iran with gasoline. [ID:nN30265500]

South Pars is on the Iranian side of the world's largest known gas reservoir not associated with oil production. ($1=1222.1 Won) (Reporting by Kim Yeon-hee; Editing by Manash Goswami)