https://www.argusmedia.com/en/news/2475502-first-gas-from-irans-south-pars-phase-11-imminent
First gas from Iran's South Pars phase 11 imminent
Iran will begin producing gas from the long-delayed phase 11 of the giant offshore South Pars field in the Mideast Gulf next week, oil minister Javad Owji said on Wednesday.
"This is the final offshore phase of South Pars, which was implemented from start to finish by this administration," Owji said. "We will begin producing between 12mn-15mn m³/d of gas at this phase from next week."
The start of production from phase 11 will mark a key milestone for Tehran given the numerous obstacles the country has faced over the past decade to bring the politically-charged project to fruition. In the early 2000s, Iran's state-owned oil company NIOC was in discussions for several years with TotalEnergies, then Total, to develop phase 11, which resulted in the signing of a preliminary non-binding agreement. Disagreements over contract terms saw Total withdraw from the project, only to be replaced by China's state-owned CNPC, which was awarded a $4.7bn contract in 2009.
Years of foot-dragging and minimal progress ensued, culminating in Iran terminating the contract with CNPC in 2012. The project was then transferred to NIOC subsidiary Petropars, but a lack of access to financial resources and foreign partners, in large part due to US and UN sanctions, prompted Iran to put the project on ice.
The signing of the Iran nuclear deal in 2015 and the subsequent lifting of sanctions gave the project a new lease of life. Tehran re-entered into negotiations with TotalEnergies and CNPC, which led to the
signing of a $4.88bn deal in the middle of 2017 ꟷ Iran's first major upstream contract award since the signing of the nuclear deal. But both companies were forced to pull out after former US president Donald Trump withdrew the US from the nuclear agreement and reimposed sanctions on Iran. TotalEnergies exited the project
in August 2018, followed by CNPC
in October 2019.
Phase 11 has been under Iranian control since, with Petropars awarded operatorship of the project. The Iranian firm began phase 11 drilling in December 2020.
The 12mn-15mn m³/d production guidance given by Owji today represents a slight upgrade to an earlier 11mn-14mn m³/d target issued by NIOC managing director Mohsen Khojasteh-Mehr. The original plan envisaged production almost doubling to just over 10bn m³/yr in a second phase. At capacity this would represent a near 4pc addition to Iran's gas production, which stood at 259.4bn m³ in 2022, according to the latest Statistical Review of World Energy.
Iran shares the South Pars field with Qatar, where it is known as the North Field — the centrepiece of Qatar's massive LNG production expansion plans.
By Nader Itayim