Page 4 - MEOG Week 03 2022

MEOG COMMENTARY MEOG

Final South Pars

phase to kick off amid

Iranian gas drive

Iran is set to kick off gas production from the final offshore phase of its South
Pars gas development amid major strain on supply/demand fundamentals.

IRAN IRAN is expected to begin commissioning The Islamic Republic holds a 3,700-square km
on the final offshore phase of the supergiant portion of the 9,700-square km deposit that
South Pars gas field development programme is shared with Qatar, where it is known as the
WHAT: by the end of September as it seeks to boost gas North Dome field. Around 80% of the field’s ini-
South Pars 11 will availability. tial gas reserves are believed to remain in place.
begin commissioning Speaking to the official state energy media SP11 is targeting the production of 2bn cubic
in September, targeting outlet Shana, the newly appointed CEO of Pet- feet (57 mcm) per day of gas.
eventual production of 57 ropars, Seyed Shamsedin Mousavi, said that Petropars was left as the only remaining part-
mcm per day of gas. the first part of South Pars 11 (SP11) would be ner in the $4.879bn project, for which stakes
launched before the second quarter of the next of 50.1% and 30% were awarded to French
WHY: Iranian calendar year, which will end on Sep- super-major Total and China National Petro-
The supergiant field tember 22. leum Corp. (CNPC), respectively in July 2017.
holds around 14 trillion The update comes amid a major gas produc- The award was made for an Integrated Petro-
cubic metres of gas tion push by Tehran, which is aiming to signif- leum Contract (IPC) model, setting SP11’s pro-
and 18bn barrels of gas icantly increase supplies to cater to rampant duction target at the time to 20.8bn cubic metres
condensates. demand. per year.
The Chinese firm became the lead investor in
WHAT NEXT: South Pars SP11 after Total withdrew in August 2018, citing
Other major gas fields are Mousavi’s predecessor, Hamidreza Masoudi, the threat of incurring US sanctions should it go
also coming into focus for said last month that the implementation of two ahead with plans.
NIOC, including Farzad new contracts for an offshore pipeline and instal- The French firm had planned to invest an ini-
A and B, Kish and North lation work at the SPD11B platform would speed tial $1bn, focusing on a section of the field near
Pars. up the offshore development. the South Pars Oil Layer, adjacent to areas of the
“The engineering, procurement and imple- field under Qatar’s control.
mentation activities corresponding to these two The company’s stake was handed over to
contracts have officially started,” Masoudi said. CNPC, with Petropars retaining the remaining
The overall South Pars development includes 19.9%, but the Chinese firm departed in 2019.
37 platforms across the field’s 24 phases to pro-
duce 700mn cubic metres per day at present of Output expansion
Iran’s roughly 1bn cubic metre per day total. The Islamic Republic has expanded gas output
Tehran is aiming to increase output from South significantly in recent years and supplies are esti-
Pars to 1 bcm per day as quickly as possible but mated to flow at an average of 850-950 mcm per
requires significant investment to maintain and day, topping out at 1 bcm.
add to production. Last year, the National Iranian Oil Co.
An additional 50,000 barrels per day (bpd) of (NIOC) announced $70bn plans to expand pro-
crude are produced from the field’s oil layer. duction capacity to 1.5 bcm per day by 2030.
Meanwhile, in late October, Pars Oil & Gas The target was reiterated by NIOC’s new CEO
Co. (POGC) said it had completed its annual Mohsen Khojastehmehr, who told Fars News
maintenance across the field’s 24 phases to Agency: “This amount of output growth is deter-
ensure stable production during winter months. mined in proportion to the needs of the country
Iran is home to around 34 trillion cubic in the future, and we really need this amount
metres of proven natural gas reserves, with the of increase in gas production to supply gas to
supergiant South Pars accounting for around 14 industries and develop Iran’s export markets.”
tcm as well as 18bn barrels of gas condensates. Speaking to Shana this week, Deputy Oil

P4 www. NEWSBASE .com Week 03 19•January•2022