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South Pars Gas Development Project, Persian Gulf

  • Project Type

    Gas field development

  • Location

    Persian Gulf, Iran

  • Capacity

    Phase 11: 2bcf/d of natural gas

  • Start of Operation

    Phase 11: 2021

  • Developers

    Phase 11: CNPC, Petropars

  • Estimated Investment

    Phase 11: $4.8bn

South Pars gas field located in the Iranian waters of the Persian Gulf forms the northern half of a supergiant offshore gas field called the North Dome field or the North field in Qatar.

Estimated to hold eight percent of the world’s total gas reserves and almostapproximately 50% of Iran’s domestic gas reserves, South Pars is considered to be the world’s biggest gas field by reserves.

The South Pars gas field commenced production in 2002 and continues to be developed in multiple phases by the Pars Oil and Gas Company, a subsidiary of the National Iranian Oil Company (NIOC).

The giant offshore gas field comprises 28 production blocks, which are being developed in 24 phases with a target to produce a total of 790 million cubic meters of gas a day.

Total 10 out of the 24 phases of the South Pars gas development project are currently in operation, while the remaining 14 phases are expected to be brought into production by 2021.

The ownership structure of the $4.8bn South Pars phase-11 development project has undergone significant changes following the USA’s decision to withdraw from the Joint Comprehensive Plan of Action (JCPOA), popularly known as the Iran nuclear deal, in May 2018.

South Pars and the US withdrawal from the Iran nuclear deal

The US re-imposed economic sanctions on Iran by pulling out of the JCPA, which was in effect since January 2016.

The Iran nuclear deal was agreed between the five permanent members of the UN Security Council, the European Union (EU), and Iran in July 2015.

The deal had lifted the previous economic sanctions on Iran in response to Iran’s commitment to take appropriate measures for the peaceful nuclear programme in the country. Total was the first major foreign oil and gas company to return to Iran in 2016, after the lifting of previous sanctions on Iran.

The US, however, withdrew from the Iran nuclear deal in May 2018 and granted a temporary waiver to few countries including China and India to engage in trade or business with Iran.

With France not exempted to do trade and business with Iran, Total had limited choice but to sell its 50.1% stake in the South Pars Phase-11.

Total officially left the Soth Pars phase-11 development in August 2018.

China National Company for Petroleum (CNCP), which already has 30% stake in the project, reportedly agreed to buy Total’s stake and hold 80.1% ownership interest in the project, in November 2018.

The remaining 19.9% interest in the project will be retained by the Pars Oil and Gas Company.

South Pars gas phase 11 development details

Total signed an agreement with NIOC to participate in the development of South Pars Phase-11 in November 2016.

The Phase 11 development contract was signed between Total, CNCP, and Petropars in 2017.

The South Pars phase 11 gas project was planned to be developed in two phases with the first phase involving 30 natural gas production wells tied-back to two wellhead platforms. Offshore compression facilities were planned to be built in the second phase.

The South Pars phase 11 project was expected to produce up to two billion cubic feet (bcf) of natural gas or 400,000 barrels of oil-equivalent (boe) a day.

The gas produced from the South Pars Phase 11 was planned to be fed to the proposed Pars LNG terminal near Tombak, on the Persian Gulf coast, Iran.

Pars LNG was proposed to be developed as an initial two-train LNG facility with a total of ten million tonnes (Mt) a year of LNG production capacity.

Pars LNG was formed as a joint venture between NIOC (50%), Total (30%), and Petronas (20%).

South Pars gas field location and discovery

The South Pars gas field is located 3,000m below the seabed at a water depth of 65m. It was discovered by the National Iranian Oil Company (NIOC) in 1990.

The entire North field including the Qatar portion occupies 9,700km², whereas South Pars in Iranian waters is the most productive portion of the field and covers 3,700km².

The South Pars gas field is estimated to hold approximately 14 trillion cubic meters of recoverable gas reserves along with 18 billion barrels of recoverable liquefied natural gas (LNG) reserves in the Iranian waters.

South Pars commenced natural gas production with the commissioning of the first and second phase development of the field in 2002.

The phases three to ten were subsequently commissioned one after another by 2009.

The onshore facilities of the South Pars gas development project are located at Assaluyeh and  Kangan near the Bushehr Port.

The remaining 14 phases of the project are currently in different stages of development and expected to be brought online by 2021.

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