President Hassan Rouhani on Tuesday officially inaugurated Phase 12 of South Pars oil and gas field in the Persian Gulf.
Touted as the biggest Iranian gas project in history, Phase 12 has capacity to produce 75 million cubic meters (mcm) of natural gas and 120,000 barrels of gas condensate per day. Plans also call for production of 750 tons of sulfur annually, ISNA reported.
Phase 12 has so far generated more than $1.5 billion in revenues. Ten gas condensate shipments, equal to approximately 11.1 million barrels, have been shipped from field to international markets. Close to 9.5 billion cubic meters of gas also was pumped from this phase into the national gas network over the past year. So far, an estimated $7.5 billion has been invested for its development. The value of Phase 12 annual output is estimated at more than $2.5 billion, and will rise to $6-9 billion, provided that its remaining units come on stream in the next Iranian calendar year (starts March 21).
South Pars is the world’s largest gas field, shared between Iran and Qatar, covering an area of 3,700 square kilometers of Iran’s territorial waters in the Persian Gulf. It adjoins Qatar’s North Field, which measures 6,000 square kilometers.
Phase 12 is SP’s biggest phase in terms of volume of work as well as investment and production level. The field is estimated to contain 14 trillion cubic meters of gas and 18 billion barrels of gas condensate.
Mega Project
“The inauguration of Phase 12 is the fulfillment of a major industrial and knowledge-based project,” Rouhani said on the sidelines of the inauguration ceremony attended by Oil Minister Bijan Namdar Zanganeh, head of the Department of Environment Masoumeh Ebtekar and several cabinet members.
The president recalled that foreign companies were to undertake the development of Phase 12, “but the project was eventually carried out by Iranians.”
According to the president, by completion of the latest SP Phase, the government has effectively contributed to the ‘economy of resistance’ - a policy recommended by the Leader of the Islamic Revolution Ayatollah Seyyed Ali Khamenei to counter the sanctions, promote domestic growth and reduce consumption.
The president was slated to launch SP Phase 12 on the 36th anniversary of the Islamic Revolution in mid-February, but according to Ali-Akbar Shabanpour, managing director of Pars Oil and Gas Company (POGC), the plan was called off “due to bad weather at the time that consequently cancelled many flights and made it difficult for officials to use helicopters to attend the event.”
Rouhani said reaching a nuclear agreement with world powers will be to the benefit of all parties, and reiterated that imposing sanctions “is no longer effective in piling pressure” on Iran.
“The sanctions will not hamper the country’s development.”
Iran is negotiating with the six world powers (the five permanent members of the UN Security Council and Germany) to complete the framework of a nuclear deal by the end of March, and clinch a full agreement by June.
Oil Production
Should SP phases come on stream according to schedule, Iran will match Qatar’s rate of extraction from SP reservoirs by the end of Rouhani’s first term in office (mid-2016), Zanganeh said on the sidelines of the inauguration.
Iran presently takes approximately 300 mcm/d of gas from SP, while the tiny Arab neighbor Qatar draws nearly double that volume. Iran’s Oil Ministry aims to increase its share from the joint field to as much as 800 mcm/d by launching 24 SP phases within the next two years.
Production and export of crude oil will increase by one million barrels per day if sanctions are lifted within the next few months, said Zanganeh. However, the minister predicted that any increase in Iran’s oil output would not greatly affect global oil prices.
An estimated $20 billion is required for the completion of all SP phases. The funding is to be provided partly via the government’s Economic Council and the remainder by the National Development Fund of Iran along with the National Iranian Oil Company (NIOC), as well as revenues saved from the judicious consumption of petroleum products.
According to Zanganeh, all SP phases will be completed within three years. Phases 13-18 are now a priority, followed by phases 19, 20, and 21.
He took stock of the increase in gas production by 120 mcm over the past year and said Phase 12 supplied roughly 68 mcm of that volume.
