The state-owned National Iranian Oil Company (NIOC) has signed a contract worth $1.78bn for the development of the offshore Farzad B gas field in the Gulf.

The contract was signed with the Tehran-based NIOC general contracting subsidiary Petropars Group, according to a statement published on the Oil Ministry’s website Shana.

The deal involves developing the field to produce 1 billion cubic feet of gas a day (Bcfd) within five years.

Farzad B is estimated to hold 22 trillion cubic feet (Tcf) of reserves, of which 16Tcf are deemed recoverable.

A signing ceremony was held on 17 May in Tehran in the presence of Iranian Petroleum Minister Bijan Zangeneh.

Zangeneh said: “Today is an important day. The contract to develop the Farzad B gas field was signed between the National Iranian Oil Company as the employer and Petropars Group as the contractor.”

The scope of the project includes:

  • Drilling eight production wells
  • Construction and installation of two main and secondary wellhead platforms
  • Construction of liquid separation facilities on the main platform
  • Construction of a 36in offshore pipeline of about 230km to transfer sour fluid from the main platform to onshore facilities
  • Construction of a 10in offshore pipeline about 230km long to transport condensate to land
  • Construction of a 20in pipeline connecting the three platforms, with a length of 3km
  • Construction of offshore facilities, including receiving equipment for the produced sour fluid and condensate separation, along with ancillary facilities
  • Construction of onshore pipelines for the transfer and distribution of sour gas and condensate to refineries located in the Pars 2 region

The contract was signed after talks failed with Indian companies that had shown an interest in developing the offshore site.

Indian companies led by ONGC Videsh, the foreign investment arm of Oil & Natural Gas Corporation, discovered the field in 2008, but talks on development rights came to nothing after former US President Donald Trump withdrew from the 2015 international nuclear pact with Iran three years ago and reimposed US sanctions against Tehran.

“The [Indian firms] were not willing to take part in the project. We negotiated with them twice, but they refused to develop the field due to sanctions,” Zanganeh said.

The gas produced by this field will be transferred to onshore facilities in Iran’s Kangan region for processing.

At the onshore facility, the gas condensate will first be separated from the sour gas and then transferred to the South Pars refineries of phases 12 and 19 for stabilisation.

The Farzad B gas field is located in the Farsi block on the border between Iran and Saudi Arabia and at a distance of about 20km from Farsi Island.

This article is published by MEED, the world’s leading source of business intelligence about the Middle East. MEED provides exclusive news, data and analysis on the Middle East every day. For access to MEED’s Middle East business intelligence, subscribe here.