South Pars Gas Project Needs $30b

Completion of the giant South Pars Gas Field in the Persian Gulf could require as much as $30 billion in investment, the chief executive officer of Pars Oil and Gas Company (POGC) said on Friday.

“The cost of South Pars development is contingent on the development plan of each phase, but in general, the field requires between $20 billion and $30 billion in additional spending,” Mohammad Meshkinfam was quoted as saying by ILNA.

POGC is a subsidiary of the state-owned National Iranian Oil Company. It has been the contractor of several phases of South Pars as well as the North Pars, Golshan and Ferdowsi gas fields in the Persian Gulf. The mega gas project is being developed in 24 phases.

According to the official, Iranian companies should play a bigger role in developing South Pars, "Nevertheless, we need collaboration and investment from international firms to complete the gas project."

One area where domestic companies need a helping hand is construction of onshore and offshore platforms.

"Nowadays, advanced oil and gas rigs weigh up to 20,000 tons. Domestic companies are not capable of building, transporting and installing such heavy platforms," he said.

Most of the existing South Pars platforms weigh around 3,500 tons and the largest platform so far constructed at home weighs 7,000 tons. To build bigger platforms, we need foreign technology."

South Pars is the world's largest gas field shared between Iran and Qatar. The field provides nearly two-thirds of Iran's demand for natural gas. It adjoins the North Dome field in Qatar's territorial waters.

In fiscal 2016-17, gas production from South Pars increased to 520 million cubic meters per day, up 150 mcm/d compared with the previous year.

POGC is also collaborating with an unnamed French company to offset the natural decline in South Pars extraction rate and raise Iran's output from the joint field.

"The cooperation is meant to give us a clear picture of the field's condition as well as necessary equipment and investment requirements to raise output," he said in a statement last week.