France's Total, China's
CNPC and Iran's Petropars were each seeking to develop Phase 11 of South Pars
gas field. But thanks to the administration of President Hassan Rouhani, the
tri teamed up for handling the job. After signing a heads of agreement, they
signed a contract under Iran's new type of contracts so that a new chapter
would open in Iran's cooperation with international firms for the development
of South Pars after more-than-a-decade hiatus. A review of the international
and technical conditions of Phase 11 shows that Iran is the winner of this
consortium is expected to develop Phase 11 offshore by using pressure booster
platforms which apply new technology. Experts say these platforms can enhance
the sour gas pressure up to 90 bar.
Hossein Taqipour, a
senior Petropars manager, says: "Given gas pressure fall-off in some South
Pars reservoirs, it is necessary to undertake measures to boost the gas
pressure before delivery to refinery as this phenomenon (fall-off) will
gradually engulf the entire field."
"Therefore, Pars Oil
and Gas Company (POGC) has assigned a feasibility study on the use of pressure
booster platforms to Petropars. For its part, Petropars has partnered France's
Doris Engineering consulting firm to consider a variety of options. These
studies are currently under way on the platforms and the reservoir of Phase 12.
Once studies are completed, the best option will be chosen by POGC to be
applied to the entire South Pars gas field for standardization.
The options under study
include boosting onshore and offshore gas pressure or combining them by using
sweet or sour gas or transferring power from coasts. Since there are 24
development phases in South Pars gas field and 42 platforms, there are plans to
study pressure boosting for them separately with the capacities of 500 and
1,000 million standard cubic feet per day (MMSCFD) or jointly with capacities
of 2,000 and 5,000 MMSCFD.
Installing and launching
pressure booster systems will facilitate gas recovery from South Pars gas field
for up to 20 more years. Therefore, construction of pressure-boosting platforms
at Phase 11 of South Pars will be just the beginning and Iranian companies and
contractors will be able to cash in on cooperation with companies building
pressure-boosting platforms for the future. For designing such platforms,
necessary arrangements have been made. So far, platforms weighing up to 7,000
tonnes have been built in the country; however, Iranian contractors need to
improve their potentials in order to reduce costs and duration of manufacturing
and installation in their own yard.
Chief among the main
equipment used in the gas pressure booster platforms is gas turbocompressor.
Negotiations for choosing a suitable turbocompressor have started with an
international manufacturer and efforts are under way for bringing in technical
knowhow for building such equipment.
$5bn Investment in Phase
Phase 11 of South Pars is
the most important gas project introduced for investment at a Tehran conference
on the newly developed format of oil contracts. Due to its location in the
South Pars reservoir, this phase is of high significance for Iran. National
Iranian Oil Company (NIOC) envisages nearly $5 billion in investment for this
specifications of this project include the recovery of nearly 2,000 MMSCFD of
gas to be processed at the refineries of phases 6-8 and 12 of South Pars.
Moreover, the offshore installations in this phase include two independent
platforms, each with 12 wells to produce 1,000 mcf/d of gas, three-phase
separator for testing wells, two three-phase separation units for separating
water, purifier of water contaminated with oil substance before release into
sea, and three-phase flare platform for emergency release. For the delivery of
gas produced at this phase, there is need for two 136-kilometer 32-inch
diameter offshore pipelines to transfer gas from platforms to refinery, two
136-km 4.5-inch diameter offshore pipeline for transferring glycol solution to
offshore platforms, a 4.5-km 36-inch diameter pipeline and single-point mooring
for loading and export of condensate.
The objective behind the
delivery of gas from Phase 11 to phases 6-8 and 12 of South Pars gas field is
to use the vacant capacity of refineries in these phases and accelerate
production in this section of the field.
In the first stage of
this project that includes building a jacket, a platform, an offshore pipeline
and drilling, the gas produced offshore will be delivered to refining
facilities in the phases 6-8 of South Pars. Phase 11B is technically similar to
Phase 11A and the gas produced at its platform will be dispatched to the
refinery of Phase 12.
Phase 11 was initially
planned to produce 56 mcm/d of sour gas for Iran LNG project and provide 80,000
b/d of gas condensate.
Phase 11, From 1990s to
In the late 1990s, NIOC
and Total reached agreement for the development of the upstream sector of Phase
11 of South Pars and building an LNG plant with an output of 10 million tonnes.
A memorandum of understanding was signed between them. Malaysia's Petronas also
expressed readiness to team up with them. A consortium of NIOC (50%), Total
(40%) and Petronas (10%) was assigned the upstream and downstream development
of this phase.
The agreement and
relevant engineering studies came against the backdrop of growing international
sensitivity towards Iran's nuclear program. From 2006 to 2008, Total did not
meet its obligations on the pretext of increased steel prices and higher costs
for the project. NIOC rejected Total's request for higher project costs and the
French company pulled out of the project. In 2009, negotiations started between
NIOC and China's CNPC and finally a $5 billion agreement was signed between
these two companies. The Chinese side failed to handle the project and it was
expelled in 2012. After that, NIOC turned to Petrorian Development Company,
Iranian Offshore Engineering and Construction Company (IOEC) and Petropars. In
September 2012, the project was awarded to Petropars. But due to financial restrictions,
Petropars dropped the project.
And in the end, a
Total-led consortium recently agreed to develop Phase 11.
To what extent can
Total's presence help Iran develop South Pars? Due to its location in the
border area of South Pars, this phase is not in appropriate conditions in terms
of reservoir pressure. Taking a look at the phases of South Pars on the map
would show that Qatar has long been extracting gas from its share of the field
by drilling horizontal and vertical wells. Iran just started producing from the
adjacent phases in the early 2000s and even in recent years. Therefore, Phase
11 is the riskiest development phase of South Pars. It needs cutting edge
technology or we would see pressure fall-off and the non-utility of its
offshore platforms. Total's presence in this phase will be a golden chance for
Iran so that the technology of building pressure booster platforms will be
indigenized to serve other South Pars platforms. That would help make up for
pressure fall-off in other platforms.
Over the past four years,
NIOC has spent half of its financial resources on the South Pars projects in
order to accelerate the development of this giant offshore field shared with
Qatar. However, there is still need for investment in order to preserve production
and keep pace with the rival.
Mohammad Meshkinfam, CEO
of Pars Oil and Gas Company (POGC), has said that nearly $20 billion in
offshore investment would be needed to avoid pressure fall-off. Experts say
Total-CNPC cooperation in South Pars would encourage other oil companies to
join this phase.
Total is a company with
international fame. However, it could not be immune to U.S. embargo due to
investment in Iran's oil sector. Over recent years, by setting up international
consortiums, Total has managed to circumvent US's D'Amato sanctions and join
South Pars. CNPC's presence is for the same reason of getting around the
Last but not least,
convincing Total to invest in South Pars would not have come true without oil
diplomacy exercised by Minister of Petroleum Bijan Zangeneh and other senior
Courtesy of Iran Petroleum