Page 4 - MEOG Week 35.indd

MEOG COMMENTARY MEOG

Iran prepares for work

on South Pars Phase 11

Progress is being made at South Pars despite foreign partners
having withdrawn amid fears of US-backed sanctions.

IRAN AS Iran continues to build out its domestic Chinese investor. Petropars is owned by the
hydrocarbon capabilities with local firms, Teh- Naftiran Intertrade Co. (NICO), a subsidiary of
ran’s attention has returned to Phase 11 of its NIOC. Middle East Oil & Gas (MEOG) reported
WHAT: supergiant South Pars gas field. While work previously that the NPV of the high-profile SP11
Local firm Petropars has been ongoing to expand other areas of the site was $116bn.
will soon begin drilling 24-phase field, work on SP11 halted following
at SP11 following the the withdrawal of IOC partners. Phase 13
departure of IOC partners A press release by the National Iranian Oil Meanwhile, the third platform (13C) at SP13
Total and CNPC. Co. (NIOC) last week quoted Minister of Petro- began sending gas to the gas refinery dedicated
leum Bijan Zanganeh as saying that local firm to the phase last week.
WHY: Petropars expected to begin drilling the first well Payam Motamed, portfolio manager of Phase
Iran is seeking to in SP11 by the end of the autumn. Zanganeh 13 at Pars Oil and Gas Co. (POGC), said that
increase output capacity said he hoped that gas from the phase would “be 400mn cubic feet (11mn cubic metres) of gas
across its oil and gas transferred to onshore facilities within a year”. had been sent so far. In a press release, Motamed
assets, in the hope Two locally manufactured, 2,200-tonne plat- added that 13C is connected through an 18-inch
that it can swiftly ramp form jackets have been installed at SP11, allow- (457-mm) pipeline to Platform 13A, from which
up market share once ing for 12 wells to be drilled. gas is sent to the refinery.
sanctions are lifted. Capacity at SP13 is currently 43 mcm per day,
Going it alone with 28.5 mcm of this coming from platforms
WHAT NEXT: Petropars was left as the only remaining part- 13B and 13D, which came into operation in
Work is likely to continue ner in the $4.879bn project, for which stakes 2018. The latest platform has added 14.2 mcm
to be handed out to of 50.1% and 30% were awarded to French per day, according to Motamed.
local companies with a super-major Total and China National Petro- He added: “This platform is the last link in
particular focus on fields leum Corp. (CNPC) respectively in July 2017. completing the production chain in the South
shared with Iraq and The award was made for an integrated petroleum Pars Phase 13 development project, and after
large gas assets. contract (IPC) model, setting SP11’s production completing its development the gas extraction
target at the time to 20.8bn cubic metres per year. capacity of this phase will reach 56 mcm.”
The Chinese firm became the lead investor in
SP11 after Total withdrew in August 2018 citing Gas superpower
the threat of incurring US sanctions should it go Iran has around 34 trillion cubic metres of
ahead with plans. The French firm had intended proven natural gas reserves, with the supergiant
to invest an initial $1bn, focusing on a section of South Pars accounting for roughly 14 tcm as well
the field near the South Pars Oil Layer, adjacent as 18bn barrels of gas condensates.
to areas of the field under Qatar’s control. The Islamic Republic has a 3,700-square km
The company’s stake was handed over to portion of the 9,700-square km deposit that
CNPC, with Petropars retaining the remaining is shared with Qatar, where it is known as the
19.9%. North Dome field.
In August last year, discussions between Tehran has a goal of increasing output from
CNPC and Tehran were reported by state media South Pars to at least 1 bcm per day as soon as
to still be ongoing regarding SP11, following possible. Zanganeh said last week that total out-
efforts a month earlier by Zanganeh to clarify the put has now reached 700 mcm per day of gas.
Chinese firm’s intentions for the project. This, he said, has increased from 280 mcm per
Zangeneh said at the time that a request from day in 2013. The minister noted that during this
CNPC to suspend operations on the project had period, 26 offshore platforms, 228 wells, 2,160
been rejected, with the Chinese company reti- km of sea pipelines and 30 refining trains had
cent to carry out development work amid the been commissioned at the field.
threat of sanctions from the US. Meanwhile, IRNA reported on August 26
Then in early October, Zanganeh reported that gas condensate production at South Pars
that CNPC had withdrawn, adding that Pet- had risen by 87% over the same period.
ropars would “carry out the job” in place of the The official media outlet quoted South

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