South Pars Progresses, Iran Defiant
As US president Donald Trump was preparing to announce May 8 whether the US would pull out from the nuclear deal with Iran, the Islamic republic said it would develop its oil and gas sector regardless.
After sealing contracts with French Total and Russian Zarubezhneft worth about $5.75bn to develop oil and gas projects, the deputy head of the National Iranian Oil Company (NIOC) Gholamreza Manouchehri told reporters May 7 that by September there would be ten contracts signed with foreign companies to develop 15 oil and gas fields and have a combined value of $40bn.
He did not name the fields or the foreign companies, but as an example he said that Iran and Indian ONGC had finalised a $6.2bn contract to start developing Farzad B in five months.
Iran introduced a new contract model, the Iranian Petroleum Contract, in late 2015 in order to attract $16bn/yr foreign investment, but the only fruit it has borne so far is French Total, which has spent $90mn preparing South Pars phase 11.
It is not clear whether Total plans to continue the project if Trump will withdraw from nuclear deal – Total has said it will abide by sanctions, whether from the US or the European Union – but NIOC CEO Ali Kardor said during a press conference May 7 that the consortium’s other member, China National Petroleum Corporation (CNPC), could take Total’s share. Total is operator with 50.1% and CNPC owns 30%. The remaining stakes belong to a local company. Neither company commented to NGW on this point by time of publication, but the contract does gives CNPC the option to do so.
Why Total is important for SP phase 11?
SP11 was divided into two phases, of which the first has nameplate capacity of 56mn m3/d and cost $2bn. This is not hard for Iran technically, even relying on domestic technology: it has already developed more than ten phases of South Pars on its own. However, the second phase requires a 20,000-metric ton platform with two or three compressors by 2022, the year before the expected pressure drop. Neither Iran nor CNPC have experience of building that. It could cost in excess of $2.5bn.
Iran launches new platform at phase 14
Iran also launched a new platform at phase 14 of South Pars, called A14, May 6. The platform now produces 14.2mn m3/d gas and Iran plans to launch a second platform by the autumn, with the same capacity. Phase 14 needs four platforms to produce 56mn m3/d.
For now, the gas is being processed at South Pars' ninth gas processing unit, which was built for gas from phase 12. However, phase 12, which is the biggest, is only operating at 78% of the 82mn m³/d capacity owing to a pressure drop. Iran plans to inaugurate phase 14’s own processing unit this year.
Iran produced 560mn m3/d sour gas from South Pars last year and plans to start up new five phases this year. Excepting phase 11, Iran plans to produce 730mn m3/yr of sour gas from 23 phases of South Pars by 2019.
In total Iran produced 214.5bn m3 refined gas during the last fiscal year to March 20, about 8% more than the previous year, of which about 70% came from South Pars. It plans to increase this volume to 250bn m³ this year.