Projects

South Pars

The South Pars field located in Iran 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.

Project Type

Oil and gas field

Location

Iran

Estimated Investment

$90bn

Phases of Development

24

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The South Pars field located in Iran 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 total gas reserves, 60% of which belong to Iran. The country’s portion of the field contains an estimated 436 trillion cubic feet.

The field is planned to be developed in 24 phases, each of which require an initial investment of approximately $1bn. The first 18 phases of development have been commissioned, while five phases are currently under development.

Details of Phase one of the South Pars field

The $770m phase one development is operated by Petropars (NIOC Pension Fund 60%, Industrial Development and Renovation Organisation 40%). Approximately $300m worth of contracts were signed with Samsung and Sadra during this the phase.

The utility facilities started operating in 2002 and the process facilities were operating by July 2003, giving a total output of one billion cubic feet of gas a day, along with 40,000bpd of gas condensates.

Phases two and three of the Iranian gas field

This $2bn development came on stream in 2002 and was officially inaugurated in February 2003. Two identical unmanned platforms, SPD 3 and SPD 4, were placed in 65m of water. Each platform receives gas from ten deviated wells, all 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, increasing to 60 million cubic feet a day.

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

Phases four and five of South Pars field

The development of phases four and five was awarded in 2000 to a consortium formed by Agip (60%) and Petropars (40%, on a buy-back basis). The project was officially inaugurated in April 2005 and is producing more than one billion cubic feet of sour gas a day. Iran’s construction share of the project was more than 44%, which is the equivalent of $850m.

Phases six to eight of the Iranian gas field

Phases six to seven constitute a single project and are divided into onshore and offshore sections. The contract for this $2.65bn scheme was awarded to Petropars as the general contractor and the Pars Oil and Gas Company as the client in July 2000. The field was appraised by a three-well programme in 2001, estimating it to contain three billion cubic feet of gas, 120,000 barrels of condensate and 3,300t of LPG.

“The South Pars field is planned to be developed in 24 phases.”

In December 2002, Norway’s Statoil was named the operator of the offshore section on behalf of its Iranian partner Petropars, the operator for the land side of the development. Statoil was responsible for building three production platforms for installation approximately 100km from land. It has also laid a 31in pipeline from each platform to a gas treatment plant on the Iranian coast.

Condensate and LPG are separated from the gas stream at the treatment plant and exported via a terminal nearby. The lean gas is then transported through a 500km pipeline to the Agha Jari field for injection as pressure support to help maintain oil production.

The contract for fabrication and installation of jackets was awarded through an engineering, procurement and construction (EPC) contract to Iranian company ISOICO. The work was completed in January 2004. The refinery project was awarded through an EPC contract in May 2002 to the TIJD consortium of Toyo of Japan, IDRO of Iran, JGC of Japan and Daelim of Korea.

Phases nine and ten development details

The contracts for these phases were signed in September 2002 with a consortium of LG Korea, OIEC (Oil Industries Engineering and Construction) company of Iran and IOEC (Iranian Offshore Engineering and Construction Company) and represent an investment value of more than $2bn.

As with phases six to eight, phases nine and ten came on stream in March 2009, and produce 25 million cubic metres of gas a day, 1,500t of butane and propane (LPG 40), 1,000 barrels of gas condensate and 1,350t of ethane a day.

Phases 11 and 12

Phase 11 will produce sour gas for the Pars LNG plant. The contract for this phase has gone to Total and Petronas, although delays forced the Iranian Oil Ministry to issue an ultimatum to Total in April 2008 to commit to the deal by June or the contract would go to a rival.

The contract for Phase 11 of South Pars was signed between the National Iranian Oil Company (NIOC) and a consortium comprising Total, Chinese National Company for Petroleum (CNCP) and Petropars Limited (PPL).

The field will be operated by Total, which owns a 50.1% stake, while CNCP of China and Petropars own 30% and 19.9% respectively. The gas field will have a production capacity of two billion cubic feet a day or 400,000 barrels of oil equivalent a day.

Phase 12 is designed to yield a daily production of 84 million cubic metres of gas. The contract for developing this phase was given to Petropars in mid-2005, and the IOEC also concluded a $745m contract with the POGC for laying the offshore pipelines. Another contract worth $386m was signed with the IOEC for the construction of the marine platforms for this phase.

“The South Pars oil and gas field covers an area of 500 square miles and is located 3,000m below the seabed.”

Phases 13 to 21

Phases 13 and 14 are dedicated to the Persian LNG project, and are a joint development between the NIOC, Shell and Repsol.

Delays in proceeding with development of these phases again forced the Iranian Oil Ministry to issue an ultimatum to Shell to commit to the deal by June or risk losing the contract. Phase 13 was commissioned in March 2019, while phase 14 is under development.

Development for phases 15 and 16 was awarded to a consortium of Aker Kvaerner, of Norway, and Iranian companies Ghorb and Sadra. These phases are designed to produce approximately 50 million cubic metres of natural gas a day for domestic consumption, in addition to one million tonnes of LPG a year for export. The cost of these two phases is estimated at $2bn and they came on stream in January 2016.

Development for phases 17 and 18 has been assigned to a consortium consisting of OIEC, IOEC and IDRO. These phases were commissioned in April 2017 and produce approximately 50 million cubic metres of gas and 80,000 barrels of condensates a day.

Phases 19, 20 and 21 of the South Pars project were officially commissioned in April 2017.

Phases 22 to 24

Phases 22, 23 and 24 are being developed with the aim to produce 56 million cubic metres of natural gas, 75,000 barrels of gas condensate and 400t of sulphur per day.

These phases will also yield 1.05 million tonnes of liquefied petroleum gas and one million tonnes of ethane annually.

The developments consist of 38 wells, four offshore platforms, two main pipelines and two infield pipelines.

These phases were developed by Pars Oil and Gas Company (POGC), a subsidiary of National Iranian Oil Company (NIOC).

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