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Memorable Year for South Pars

(Saturday, May 27, 2017) 15:17

TEHRAN, (Shana) -- Fifteen years have passed since Iran started developing South Pars gas field. Total recovery from this offshore field, which Iran shares with Qatar, stood at 280 mcm/d in 2013. But now it has reached 540 mcm/d. In other words, development of South Pars has picked up speed under the administration of President Hassan Rouhani.


Fifteen years have passed since Iran started developing South Pars gas field. Total recovery from this offshore field, which Iran shares with Qatar, stood at 280 mcm/d in 2013. But now it has reached 540 mcm/d. In other words, development of South Pars has picked up speed under the administration of President Hassan Rouhani. Iran has neared Qatar in terms of recovery from South Pars after the startup of phases 12, 15 and 16. Five phases (17, 18, 19, 20 and 21) became operational in the Iranian calendar year which ended on March 20. That breakthrough came while the Rouhani administration was facing international sanctions and financial shortages at the time it took office in 2013.

Project Delay Compensated
Mohammad Reza Chelipa, project manager at Phases 17&18 development, said the two phases included four platforms each with a production capacity of 500 mcf/d, two pipelines (32 inches in diameter) plus onshore facilities. 
"With their startup we will see 56.5 mcm/d of gas recovery," he said.
Chelipa said the contract for phases 17&18 was finalized in 2006 and relevant operations started one year later. However, he noted, the project did not progress sufficiently due to changes of the contractors. The project was supposed to come on-line in 52 months, but repeated delays did not let that happen.
When the development project started seriously by contractors, Iran's oil sector was slapped tough sanctions, and faced serious problems for equipment procurement.
"The slow pace of work was under way in phases 17&18 until in 2013 the 11th administration's Ministry of Petroleum changed approach [vis-à-vis the project] and we witnessed progress following all-out support by the client and National Iranian Oil Company (NIPC) for contractors. As a result, the 30% delay in the project was made up for," Chelipa said.
He said that a main challenge in the development of these two phases was designing a treatment facility which would be different from other treatment facilities at South Pars.
"The difference lies in the fact that this treatment facility was initially designed by foreign companies, but we were then forced to change the basic design. As a result we gained new experience in designing and launching projects," he added.
Chelipa said in the phases 17&18 development, engineering sector accounts for 4% of work, equipment and commodity purchase for 59% with the rest going to manufacturing, installation and startup. Domestic sector makes up for 88% of engineering, 41% of commodity purchase and 99.4% of manufacturing, installation and startup.
"Therefore, one can argue that domestic share of implementation of this project is 65% and more than 180 million persons/hours of work have been done in this project," he added.
Chelipa said that in terms of weight 37% of activities related to the refinery was done over the past three years. He said that the first treatment unit in this project became operational in January 2015 to allow gas injection into national network. "That came under circumstances that even Ministry of Petroleum could not imagine that we would be able to inject gas into national network at a time the country was facing shortages," he added.
Chelipa said: "Statistics indicate that from January 2015 to February 2017 we injected a total of 12.6 bcm of sweet gas into national network and exported 374,000 tons of ethane and more than 14.3 billion barrels of gas condensate."
"During the ten years that have passed since phases 17&18 of South Pars became operational, one of our toughest days was still the first production from these phases, the time when Iranian contractors with little experience in running treatment facilities joined this part of the project," he said, adding: "At that time it was a new experience and making sure about gas transmission to the treatment facility in full safety and then injection into national network had doubled our responsibility. Apart from that, every unpredictable incident could happen at any time. But the refinery started work under safe conditions and we took a sigh of relief."
Chelipa said: "Today Iranian contractors have become so powerful in South Pars that the Ministry of Petroleum has endorsed their qualifications for activity in the exploration and production (E&P) sector and they can easily operate offshore and treatment facility construction projects – all this under conditions  that few companies can operate such megaprojects."
Prioritization and Phase 19 Development
Hamid-Reza Masoudi, project manager at Phase 19 development, said that development of Phase 19 was of high significance due to its location at demarcation point between South Pars and North Dome of Qatar. "That's because gas migration towards Qatar and delay in the development of this field will help Iran's rival recover more than Iran," he said.
"Iranian contactors started developing this phase at a time Iran's petroleum industry was under sanctions and financial restrictions and the blockade of entry of certain equipment [into Iran] for this project had intensified the problems," Masoudi said.
He noted that absence of finance and subsequently the failure to settle debts to manufacturers, impossibility of money transfer for the purchase of equipment and lack of cooperation with vendor lists were among problems related to the implementation of this project. "In certain cases we had to place a new order for the manufacturing of commodities and that meant delay in the work."
Masoudi said it would be no exaggeration to say that the 11th administration's policymaking with regard to prioritization of the project and allocation of resources to the South Pars projects, as well as implementation of Iran's nuclear deal with world powers contributed to the recovery of 56.6 mcm/d of gas from this phase.
"Phase 19 operations that started during sanctions taught Iranian contractors valuable lessons about how to transfer currency and receive commodities," he said.
"On the other hand, one of the most difficult steps in implementing this project was coordination among divisions and sections in a balanced manner. Drilling, pipe-laying, platform construction and refinery building sectors were developed in a balanced way," said Masoudi. 
He said that Phase 19, which Iranian contractors brought into operation, was the most leading project in newly-launched projects of South Pars. Within six months, three trains of treatment facilities in Phase 19 came on-stream, sweet gas was delivered to national network and gas delivery to treatment facility started in a record 70 days after the installation of Platform 19A. Furthermore, 10,000 jobs were created directly and all payments became regular.
Masoudi said 5 bcm of sweet gas had been injected into national gas network in February when 6.5 million barrels of gas condensate were also exported. "These achievements ahead of the startup of the project earned the country $890 million in revenue," he added.
"For me, South Pars is a like a child with whom I have passed most days of my life and I have closely watched contractors grow and increase their capabilities. Now I can say that through wisdom, foresight, prioritization and precise planning we will be able to operate very big projects in the country," said Masoudi.
Domestic Capabilities
Ali-Reza Ebadi, manager of Phases 20 &21 development, said these phases would lead to the recovery of 56 mcm/d of gas from South Pars.
"Implementing such megaprojects in the petroleum industry has only one meaning, that is the growth and dynamism of Iranians in operating oil projects," he added.
Ebadi referred to widespread activities under way for implementing this megaproject, both in the offshore and onshore sectors, adding: "For instance, 7,000 kilometers of cable has been laid out in the treatment facility of this phase, which is even 600 kilometers more than the 6,400-kilometer radius of the Earth. Or 300,000 cubic meters of concrete has been poured in this treatment facility, which is 14 times the concrete poured at Tehran's Milad Tower."
He noted that the amount of activities carried out in the offshore sector were less than that of the onshore sector and treatment facility building. 
That is because platforms weighing several thousand tons along with their belongings have all been built onshore and are then carried offshore. However, the offshore sector often needs special equipment whose procurement makes the job more difficult than the onshore sector", he said.
Ebadi added: "However, onshore activities are by no means simple due to the high volume of work and had such activities as drilling, pipelaying, treatment facility and platform construction not been done in parallel, and simultaneously we could not have witnessed recovery and transmission of gas to national network."
He said that domestic capabilities had been used to maximum level in the implementation of this project and more than 65% of needed equipment had been supplied by Iranian manufacturers.
"For example, for the first time, an Iranian company manufactured the control system of onshore and offshore refinery of these phases or 200 processing pumps were provided by domestic manufacturers and all of them left behind successful experiences and registered a brilliant background," Ebadi said. 
"Although the contract for the development of these phases was signed in 2020 and their implementation at the same time as the toughening of sanctions against Iran turned into one of the biggest challenges of the petroleum industry with regard to financing and equipment procurement which intensified the problems, it was a factor for reliance on and trust in domestic manufacturing for the supply of most of equipment and further confidence in domestic companies which displayed in the offshore and treatment facility building sectors that they deserved such a trust," he added. Ebadi noted that six more phases of South Pars would become operational before the next election is held, bringing Iran's recovery from South Pars to the same level as Qatar's. 
"The importance of this issue will be known when we take into account that Iran's share of this 9,700-square km field is 3,700 sq km and the Qataris have a bigger share than Iran in this field," he said. "However, over the past three years through planning and prioritization of projects we have witnessed the revival of this project and fastness in the operations. Without precise planning and follow-up by the Minister of Petroleum we could not have seen early production from Phases 20&21 of South Pars."



Courtesy of Iran Petroleum