Iran Raises S Pars Investment Target

Last year’s plan to attract $8.7bn into Iran's giant South Pars gas field was only partly successful: it raised $4.2bn, less than half the target, owing to financial problems. But "for the current year, we are planning to attract $6.4bn," the managing director of Pars Oil and Gas Company Ali Akbar Shabanpour said at a conference in Tehran August 23.

Economic sanctions imposed by western countries to persuade Iran to curb its ambitious nuclear program in mid-2012 were lifted in January 2016. This unblocked tens of billions of dollars’ worth of Iran’s assets abroad and allowed the country to export more crude.

Iran has to date invested $55bn in the development and production side of the South Pars gas field but needs another $11bn to finish the project, he said.

Coming to the current year's projected investment, he said that the country is not facing financial deficit. South Pars, a reservoir that extends into Qatar where it is known as the North Field, accounts for over 58% of Iran's total gas output, which stands at 735mn m³/d.

"Iran will reach Qatar's output by June 2017 by adding 100mn m³/d to the field's output, starting phases 18, 19, 20, and 21,” the CEO said.

Iran started developing the South Pars field a decade after Qatar, and had begun 10 out of the planned 24 phases by 2009. First the contract regime and then the sanctions restricted the flow of capital but nevertheless phases 12, 15, 16 and 17 have come on stream.

Shabanpour said that by the end of the current administration’s term (August 2017) the output will have increased by 300mn m³/d, adding the total output will reach 800mn m³/d by 2020, after full implementation of all 24 phases.

South Pars complex (Credit: presstv-ir)

The field now produces 430mn m³/d and phases 18, 19, 20 and 21 will be partially operational by June next year, increasing the gas field’s output to 530mn m³/d, equalling Qatar in production.

Shabanpour added that Phases 13, 14, 22, 23, and 24 are 70% done and will come on stream by the end of the next fiscal year (March 2018).

Phase 11 (with 50mn m³/d output capacity) will be the only remaining phase which is projected to be developed using foreign investment, with no contract so far awarded. He went on to say that 14 drilling rigs are operating in the gas field.

Iran desk