SP Phases 15, 16 Investment to Return in 2 Years

SP Phases 15, 16 Investment to Return in 2 YearsSP Phases 15, 16 Investment to Return in 2 Years

The newly inaugurated phases of South Pars Gas Field will generate a return on investment in less than two years, managing director of Pars Oil and Gas Company said.

"Considering the $40 oil and a 20-cent-per-cubic-meter feedstock, phases 15 and 16 will generate $2.6 billion in annual revenues, equaling 1% of the country's gross domestic product," Ali Akbar Shabanpour was quoted as saying by Mehr News Agency.

The two phases were initially estimated to cost $2.9 billion, but the estimate was revised to $5.5 billion because of rising costs incurred by the import of parts equipment on the back of international sanctions imposed on Iran.

Earlier this week, Deputy Oil Minister Rokneddin Javadi said phases 15 and 16 will generate revenues worth $20 million per day, or about $7.2 billion annually.

The two phases are aimed at producing more than 50 million cubic meters of gas and 80,000 barrels of gas condensates per day as well as 400 tons of sulfur, 1 million tons of ethane as feedstock and more than 1 million tons of liquefied natural gas annually.

In addition, President Hassan Rouhani proclaimed in his speech on Monday that Iran can generate $100 billion a year from South Pars.

The country needs around $10 billion in investment to complete the remaining South Pars phases.

"At present, Iran extracts 420 million cubic meters of gas per day from the active phases of South Pars Gas Field, while Qatar's output from the joint field is 1.7 times more than Iran, down from 2.5 times before the six new phases start production," Shabanpour said.

The tiny Arab neighbor Qatar has a daily output of 650-700 million cubic meters of natural gas from South Pars.

As over 70% of phases 15 and 16 have been implemented by Iranian contractors, they are hailed as "the most Iranian phases" of South Pars.

South Pars is the world’s largest gas field shared by 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.

A lack of modern technology and budget has hampered the development of joint hydrocarbon fields, allowing neighbors to draw the lion's share of underground reserves. But officials say Iran can top Qatar's rate of extraction once all 28 phases of South Pars become operational.