Iran signs major natural-gas deal with France’s Total
French energy giant Total on November 8 signed a deal with the National Iranian Oil Company (NIOC) for the development of Phase 11 of South Pars, the world’s largest natural gas field. It is Iran’s first major contract with a Western energy company since the lifting of international sanctions on the Islamic Republic.
In a statement on November 8, Total said it will lead a consortium including China National Petroleum Corporation and Iran’s Petropars to develop Phase 11 of South Pars.
The South Pars 11 project (SP11) will have a production capacity of 1.8 billion cubic feet per day, or 370 000 barrels of oil equivalent per day. The produced gas will be fed into Iran’s gas network, the French company said.
Total will operate the SP11 project with a 50.1 percent interest alongside Petropars (19.9 percent), a 100-percent subsidiary of NIOC, and the Chinese state-owned oil and gas company CNPC (30 percent).
Total said there would be a total investment of $4.8 billion. The development and operation of the project is due to last 20 years.
Total will also launch engineering studies and a call for tender process so that construction contracts can be awarded immediately upon signature of the final agreement.
The SP11 project will be developed in two phases. The first phase, with an estimated total cost of around 2 billion dollars equivalent, will consist of 30 wells and 2 well head platforms connected to existing onshore treatment facilities by 2 subsea pipelines. At a later stage, a second investment phase, involving the construction of offshore compression facilities, will be launched once required by the reservoir conditions.