The government has approved the outline for allocating $1 billion to invest in natural gas projects and guarantee the repayment of investments, the oil minister said.
“The fund is set to assist the development and maintenance of gas infrastructures, build new storage facilities, supply remote villages with gas, give letters of guarantee to investors and issue debts and bonds to help finance incomplete gas projects,” Javad Owji was also quoted as saying by ILNA.
The fund will also facilitate knowledge-based companies' investment in the sector, he added.
Owji noted that the development of upstream oil and gas sectors tops the National Iranian Oil Company’s priorities, as it is essential to ensure the security and supply of energy in the future.
“Although Iran has made noticeable progress in the gas sector, the absence of investment in recent years will take a toll on production capacity in the near future,” he said, adding that the daily output from the South Pars Gas Field off the Persian Gulf is now 750 million cubic meters and will reach 1.2 billion cubic meters per day by 2024, but then a downtrend would begin.
According to the minister, production is expected to fall by 28 mcm/d, which amounts to 10 bcm per year as of 2025.
Estimates suggest output will be around 400 mcm/d in 2032, when consumption will exceed 1.5 bcm/d unless pressure reduction in wells is controlled.
"The installation of offshore compressor stations in the field is the only long-term viable option to control pressure reduction," he said.
The field will not be able to produce 750 mcm of gas per day (the current output) forever and the eco-friendly resource should be used as wisely as possible.
Recent reports said household gas consumption will surpass 750 mcm/d in the winter.
Postponing Pressure Reduction
Referring to short-term strategies to postpone pressure reduction, Ali-Akbar Majed, the head of Oil and Gas Engineering Department at the Pars Oil and Gas Company, said the company has started to acidize offshore wells and this would delay the process by three years.
"By 2025, the pressure is expected to decline by 28 mcm per year unless special platforms and compressors are installed,” he added.
South Pars accounts for 80% of Iran’s gas needs and the decline in output will create insurmountable problems for households, industries and thermal power stations.
“NIOC has generated almost $355 billion in revenues over the last 18 years by selling the gas field’s products, including gas condensates, natural gas and its derivatives,” Mohammad Meshkinfam, the former managing director of POGC, said.
“The company has extracted around 2 trillion cubic meters of gas from the field since 2002.”
Iran’s daily withdrawal from SP was 282 million cubic meters per day in 2013, but it has now reached 750 mcm/d.
“The giant hydrocarbon field accounted for 10% of Iran’s gas production in 2002. Nevertheless, the share has now risen to 70%,” he said.
POGC’s former chief said an estimated $50 billion are needed to develop and maintain gas fields across Iran over the next 20 years.
“Of the total investment, about $30 billion would be for projects in the giant gas field,” he added.
South Pars, the world's largest proven offshore natural gas reservoir, contains at least 12 trillion cubic meters of gas, of which 2 tcm have been extracted by Iran in the past 18 years.
Meshkinfam said that of the total reserves, close to 9 tcm are extractable.
South Pars has 24 phases, all of which, except Phase 11, are operational. The mega project includes 39 offshore platforms.
