South Pars, Qatar North Field, Iran

The Iranian South Pars field is the northern extension of Qatar's giant North Field. It covers an area of 500 square miles and is located 3,000m below the seabed at a water depth of 65m. The Iranian side accounts for 10% of the world's and 60% of Iran's total gas reserves. Iran's portion of the field contains an estimated 436 trillion cubic feet.

The field is planned to be developed in around 30 phases, each of which will require an initial investment of around $1bn. The first 12 phases of the development are underway.

PHASE I

The $770m development is operated by Petropars (NIOC Pension Fund 60%, Industrial Development and Renovation Organisation 40%). Around $300m of contracts were signed with Samsung and Sadra. The first stage is slated for early 2003 with a total output of one billion cubic feet of gas and 40,000 billion barrels of gas condensates a day.

PHASES II AND III

The $2bn development came on stream in 2002. In total, the two identical unmanned platforms, SPD 3 and SPD 4, were placed in 65m of water. Each platform receives gas from ten deviated wells, all located within a radius of 3,000m. The platforms are linked to the onshore treatment system by two 32in diameter, 105km-long multiphase lines. It initially produced 13.5 million cubic feet of gas a day, rising to 60 million cubic feet a day.

It will eventually be ramped up with the second and third phases of the project to an output of approximately two billion cubic feet of natural gas and 80,000 barrels of condensates a day. The field is operated by TotalFinaElf (40%) on behalf of Petronas (30%) and Gazprom (30%).

PHASES IV AND V

Phases IV and V are expected to be completed by 2006. The field will be operated by ENI (under a buyback contract) with Petropars holding the remaining 40%.

PHASES VI TO VIII

Phases VI to VIII cost a total of $2.65bn. The field was appraised by a three-well programme in 2001, estimating the field to contain three billion cubic feet of gas, 120,000 barrels of condensate and 3,300t of LPG a day.

The phase is operated by Statoil on behalf of its Iranian partner Petropars, which is operator for land side of the development. The group will be responsible for constructing three production platforms for installation about 100km from land. It will also lay a 31in pipeline from each of these facilities to a gas treatment plant on the Iranian coast.

Condensate and Liquefied Petroleum Gases (LPG) will be separated from the gas stream at the treatment plant and exported via a new terminal being constructed nearby. The lean gas will be transported through a 500km pipeline to the Agha Jari field for injection as pressure support to help maintain oil production.

Plans call for the first stage of the project to come on stream in late 2004, with the third and final phase due to start production by the summer of 2006.

PHASES IX TO XII

Phases IX to XII were bid for in 2001. The $1.6bn contract to develop phases IX and X was awarded to Lucky Goldstar (LG) Construction of South Korea BP.

Phases XI and XII will produce LNG. The contract for phase XI has gone to Shell and Total. The first of three jackets for the wellhead platforms to be installed in phase XII is ready to be rolled up by mid-May 2008.

Iranian Offshore Engineering and Construction Company (IOEC) has also concluded a contract with the Pars Oil and Gas Company (POGC), Iran's state operator and the employer in the project, valued at $745m for laying the offshore pipelines.

Another contract worth $386m has been signed with the IOEC for building the marine platforms for phase XI.

PHASES XIII TO XVIII

The contract for phase XIII has also been awarded to Shell and Total but delays by the two operators in developing this phase and phase XI caused the Iranian Oil Ministry to issue an ultimatum in April 2008 for them to commit to the deal by the June or the contract would go to a rival.

Phase XIV development will be for a gas-to-liquid plant, with Statoil among those reportedly interested. This could be completed by 2008.

Development for phases XV and XVI has been awarded to a consortium of companies headed by Aker Kvaerner of Norway. Cost of these two phases will be $2bn.

Development for phases XVII and XVIII has been assigned to a consortium consisting of Oil Industrial Engineering and Construction Company (OIEC), Iran Offshore Engineering and Construction (IOEC) and Petropars. These phases are expected to produce two billion cubic feet (57,000,000m³) of gas and 70 million barrels (11,000,000m³) of condensate a day.

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