Once complete, this project will have the capacity to produce 1.8 billion cubic feet of gas a day or 370,000 barrels of oil equivalent.
Produced gas will be used in Iran's domestic gas network.
Total will have operating rights of SP11 project, which it has a 50.1% interest in. Remaining interest holders are Petropars (19.9%), a 100% subsidiary of NIOC, and the Chinese state-owned oil and gas company CNPC (30%).
Total chairman and CEO Patrick Pouyanné said: “Following Total’s successful development of phases two and three of South Pars in the 2000s, the group is back to Iran to develop and produce another phase of this giant gasfield.
“Total is delighted to have been selected by NIOC, it is a recognition of both our technical expertise and the partnership the group has built with Iran over the years. Total is pleased that the discussions with NIOC resulted in an attractive commercial framework.
“Total will develop the project in strict compliance with national and international laws and looks forward to working alongside the Chinese state-owned company CNPC in this additional international partnership.”
Under the HoA, NIOC and the project partners will conduct exclusive negotiations to settle a 20-year contract complying with the technical and economic terms established in the HoA and within the framework of Iranian Petroleum Contract (IPC).
The IPC was recently approved by the Iranian Parliament.
Total will also simultaneously start engineering studies and commence a tender process to ensure that construction contracts are awarded immediately after the signing of final agreement.
The SP11 project will be developed in two phases.
The first phase will consist of 30 wells and two well head platforms connected to existing onshore treatment facilities by two subsea pipelines. The total cost at this stage is estimated to be around $2bn.
In the second stage, it will develop offshore compression facilities as required by the reservoir conditions.