The National Iranian Oil Company signed an agreement with the domestic oil company Petropars to develop the Farzad B Gas Field in the Persian Gulf that is shared with Saudi Arabia.
The $1.8 billion contract will raise natural gas output to 28 million cubic meters per day by 2026 from the present 5 mcm/d.
The buyback contract was signed by Hamidreza Masoudi, managing director of Petropars and Masoud Karbasian, head of NIOC in Tehran on Sunday, the Oil Ministry news portal reported.
“Sour gas from the field will be transferred to Kangan Petro Refining Company (KPRC) in Bushehr Province to be processed and piped to refineries in the South Pars complex in Asalouyeh to be injected into the national grid,” Karbasian said.
Unlike natural gas reserves in the giant South Pars Gas Field that are rich in condensates —an ultra-light oil— which can be converted into value-added commodities, gas from Farzad B will either be processed and pumped into pipelines or be converted into LNG, he added.
Farzad-B is estimated to hold more than 500 billion cubic meters of in-place reserves of which 370 billion is recoverable.
Iran and Saudi Arabia have a handful of shared fields, namely Farzad A, Farzad B and Arash.
Discovered by a consortium of Indian companies a decade ago, the field was to be tapped by an Indian consortium led by ONGC Videsh Ltd, the foreign investment arm of India’s Oil and Natural Gas Corporation. However, years of negotiations with the Indian side failed largely due to ONGC’s procrastination.
In 2019 NIOC eventually came to the conclusion that Iranian companies could do the job and Petropars started conducting feasibility studies to develop the field.
Petropars was founded in 1998 to help develop the vast energy resources. It is one of the main players in the upstream oil and gas industries.
South Azadegan Oilfield
The company was contracted to develop the giant South Azadegan Oilfield in Khuzestan Province in 2018. The $1.3 billion agreement calls for raising output to 320,000 barrels a day by 2023. The field’s total production was 45,000 barrels in 2013, which now has increased to 140,000 bpd. It is also constructing an oil processing plant at the oilfield estimated to cost $300 million.
The firm was tasked with developing Belal Gas Field in the Persian Gulf in 2019. The field will produce 14 mcm/d of sour gas in three years that will be transferred to an offshore platform of Phase 12 of South Pars Gas Field (off the Persian Gulf). After processing it will be pumped to an onshore refinery via an undersea pipeline.
SP Phase 11
In related news, IRNA quoted Masoudi as saying that Mapna Drilling Company completed drilling six wells in the South Pars Gas Field Phase 11 off the Persian Gulf in four months.
The Petropars CEO said 6,500 meters of the offshore well was dug as a part of the first phase of the project. “Four horizontal wells were dug and work on drilling two vertical wells ended in April.”
The six wells are being connected to the first wellhead jacket installed last year and an estimated 14 million cubic meters of gas per day is expected to be taken from the phase by the end of the year.
Regarding funding, he said $15 million has been invested and $70 million is needed to complete the first phase of the scheme by early next year.
“Part of the funds will come from selling bonds.”
Seven more wells will be dug in the second phase. Installation of the first wellhead jacket ended last December.
Iran is priming its oil and gas fields -- and customer relationships -- so it can increase production and exports as it inches closer to an agreement with the world powers in Vienna to left the US sanctions.
