Page 5 - MEOG Week 29 2022

MEOG COMMENTARY MEOG

in the field but production has yet to commence. of construction on pressure boosting platforms,
According to NIOC, 46 operating wells are though this figure appears to loosely relate
required for the field to reach the 3.6bn cubic feet to high-case scenarios for full-field pressure
(102mn cubic metres) per day output that it is installations.
anticipated to produce for at least 25 years. Some Iran is home to around 34 trillion cubic
production will continue for 35 years, though, metres of proven natural gas reserves, with the
based on a recovery rate of 60%. supergiant South Pars accounting for around 14
Meanwhile, Kish was discovered in 2006. tcm as well as 18bn barrels of gas condensates.
It lies under Iran’s Kish Island and is estimated The Islamic republic holds a 3,700-square km
to hold 66 tcf (1.9 tcm) of gas and at least 1bn portion of the 9,700-square km deposit that
barrels of condensate. Of this, around 50 tcf (1.4 is shared with Qatar, where it is known as the
tcm) and 331 million barrels, respectively, is North Dome field. Around 80% of the field’s ini-
deemed recoverable. tial gas reserves are believed to remain in place.
Development of the field was kick-started The overall South Pars development includes
in late March 2007 with a $2.2bn allocation of 37 platforms across the field’s 24 phases to pro-
funds from the NIOC for the first phase, which duce 700-750mn cubic metres per day at present
will be conducted by Iran’s own Petroleum Engi- of Iran’s roughly 1bn cubic metre per day total.
neering and Development Co. (PEDEC). Tehran is aiming to increase output from South
This was bolstered in 2010 with a further Pars to 1 bcm per day as quickly as possible but
$10bn loan agreement with an Iranian consor- requires significant investment to maintain and
tium headed by Bank Mellat. However, owing to add to production. An additional 50,000 barrels
inadequate equipment and expertise, it was not per day (bpd) of crude are produced from the
until April 2014 that tangible parameters for first field’s oil layer.
phase development (which has now begun) were SP11 is targeting the production of 2bn cubic
agreed. feet (57 mcm) per day of gas.
The development plan for the field involves Petropars was left as the only remaining part-
the construction of the four projected gas refin- ner in the $4.879bn project, for which stakes
eries in the Garzeh region in the southern Hor- of 50.1% and 30% were awarded to French
mozgan Province, rather than on the island super-major Total and China National Petro-
itself – which is a key tourist destination – and leum Corp. (CNPC), respectively in July 2017.
will be linked to the 14 onshore wells via a 19-km The award was made for an Integrated Petro-
pipeline. leum Contract (IPC) model, setting SP11’s pro-
duction target at the time to 20.8bn cubic metres
Pars pressure per year.
Later the same day, Khojastehmehr said that Khojastehmehr added that SP11 holds some
Gazprom’s assistance would help bring the final of the field’s largest and most complex reservoirs.
development phase of South Pars on-stream In January, Petropars CEO Seyed Shamsedin
during the winter, to boost supplies when Mousavi said that commissioning would begin
demand is at its peak. on the first production platform at SP11 – SP11B
He said that NIOC had successfully negoti- – by the end of September.
ated with Gazprom for the Russian firm to install Four years removed from the collapse of the
pressure booster platforms at South Pars phase Joint Comprehensive Plan of Action (JCPOA), a
11 (SP11). lack of alternatives for either Russia or Iran has
“Exploration and concept studies on this seen Gazprom’s and NIOC’s paths cross for a
project have ended and foundational studies marriage of convenience.
are underway ... we hope gas production from Together though, despite the Russian firm’s
Phase 11 will materialise in winter this year,” he output falling by around 31% on the back of
told the semi-official ILNA news agency. Local sanctions, will account for a just under 2bcm per
media outlets said that the deal with Gazprom day or around 18% of global supply. That alone
will see the Russian firm carry out $15bn worth is a powerful proposition.™

Week 29 20•July•2022 www. NEWSBASE .com P5