The China National Petroleum Corporation (CNPC) has withdrawn from a contract to develop phase 11 of the South Pars gas project offshore Iran.
The company had previously suspended its investment in the project in December 2018, following US-imposed sanctions on Iranian exports.
The South Pars field is located in the Persian Gulf, 3,000m below the seabed at a water depth of 65m. It is the world’s largest gas field, covering an area of 9,700 km2, with the Iranian section of the field accounting for 10% of global gas reserves and 60% of Iran’s total gas reserves.
The contract to develop the South Pars field was signed in 2017 with a consortium consisting of CNPC, with a 30% share in the project, as well as French oil and gas multinational Total (50.1%) and Iranian oil and gas company Petropars (19.9%).
CNPC was the only international partner left in the project following Total’s departure from the development in December 2018, with Total also citing the US sanctions as the reason for its departure.
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Zangeneh said: “The fate of the South Pars Phase 11 has been determined and Petropars will continue developing the project alone and by the end of this year the first jacket will be installed in the phase for a platform with 500 million cubic feet per day of gas production capacity.”
Tensions between Iran and the West have heightened recently, following an attempt by three Iranian vessels to impede the passage of a British tanker in July 2019, and the seizure of a tanker suspected to be carrying Iranian oil to Syria by UK commandos offshore Gibraltar earlier in July 2019.
In response to President Trump pulling the US out of the 2015 JCPOA nuclear accord in May 2018 and imposing sanctions on Iranian exports, Iran breached the limits placed on its stockpile of low-enriched uranium in July 2019, with further breaches threatened by Iranian president Hassan Rouhani in September 2019.