French energy giant Total and the National Iranian Oil Company (NIOC)
have signed a contract for the development and production of phase 11
of South Pars (SP11), the world’s largest gas field, Total said in a
press release on July 3.
The project will have a production capacity of 2 billion cubic feet
per day or 400,000 barrels of oil equivalent per day including
condensate. The produced gas will supply the Iranian domestic market
starting in 2021.
Total Chairman and CEO
Patrick Pouyanné hailed the
“major agreement,” noting that it officially marks the French company’s
return to Iran to open a new page in the history of Total’s partnership
with Tehran.
“We are proud and honored to be the first international company to
sign an IPC, which offers an attractive commercial framework, following
the 2015 international nuclear accord (JCPOA) and to therefore
contribute to the development of relations between Europe and Iran,”
Pouyanné said.
“Total will develop the project in strict compliance with applicable
national and international laws,” Pouyanné said. “This project is in
line with the Group’s strategy to expand its presence in the Middle East
and grow its gas portfolio by adding low cost, long plateau assets,” he
added.
India has reportedly already announced that a consortium of domestic
businesses would offer up to $11 billion to develop another of Iran’s
natural gas fields, Farzad-B field, and create the infrastructure to
export the fuel, according to Bloomberg.
The 20-year contract with Total is the first Iranian Petroleum
Contract (IPC) and is based on the technical, contractual and commercial
terms as per the Heads of Agreement signed on November 8, 2016. Total
is the operator of the SP11 project with a 50.1% interest alongside the
Chinese state-owned oil and gas company CNPC (30%), and Petropars
(19.9%), a wholly owned subsidiary of NIOC.
According to Total, SP11 will be developed in two phases. The first
phase, with an estimated cost of around $2 billion equivalent, will
consist of 30 wells and 2 wellhead platforms connected to existing
onshore treatment facilities by 2 subsea pipelines. At a later stage,
once required by reservoir conditions, a second phase will be launched
involving the construction of offshore compression facilities, a first
on the South Pars field.
Since the November 2016 Heads of Agreement signature, Total has been
conducting engineering studies on behalf of the consortium and initiated
calls for tender in order to award the contracts required to develop
the project by the end of the year, according to the French energy
company.
https://www.neweurope.eu/article/frances-total-iran-ink-south-pars-gas-field-contract/