South Pars Phase 11 Development Will Cost Upwards of $5b

  • South Pars Phase 11 Development Will Cost Upwards of $5b

South Pars Phase 11 Development Will Cost Upwards of $5b

The French company signed a draft agreement with the National Iranian Oil Company (NIOC) in November 2016, but announced in February 2017 that a final decision on the deal hinged on the new United States administration renewing sanctions waivers on Iran. The Persian Gulf field lies at the centre of a dispute embroiling Qatar and several Arab neighbours that was initiated when Saudi Arabia severed commercial links with Qatar last month, accusing it of cozying up to Iran, a Saudi rival.

According to a statement on Total's website, the Phase 11 project will be developed in two phases.

Phase 12, which is the largest development phase of South Pars gas field in terms of operation, investment and production, has the capacity of producing 75 million cubic meters per day (mcm/d) of sweet gas, 120,000 barrels per day of gas condensate and 400 tons per day of sulfur. "Furthermore, domestic oil and gas industry will gain access to advanced technical know-how". Under the preliminary November accord, Total will control 50.1 per cent of the project, while CNPC will have a 30-per-cent interest and Iran's Petropars, 19.9 per cent.

The lawmaker underlined the gas deal as a "major achievement" at a time when the hostile policies of US President Donald Trump against Iran are aimed, among other things, at marginalizing the country in the global energy market. The producer is wooing companies such as Total, Royal Dutch Shell PLC and Russia's Lukoil PJSC to invest in its oil and gas fields to boost output.

Reportedly, with U.S. sanctions still in place prohibiting trading with Iran in dollars, Total will finance the project in euros from its own resources.

This would allow foreign companies a greater level of certainty and incentive.