A consortium led by Total has signed a contract with the Iranian national oil group, National Iranian Oil Company (NIOC), for the development of the phase 11 of the Iranian South Pars gas field (SP11), the largest gas field in the world.
The deal will have a 20-year duration and is the first Iranian Petroleum Contract (IPC), which offers to the operator remuneration based on production instead of a percentage of the development costs. The agreement is the logic sequel of the November 2016 Heads of Agreements (HoA).
In the meantime, Total has been conducting engineering studies on behalf of the consortium and has started calls for tender in order to award the contracts required for the development of the project. SP11 will be operated by Total (50.1%), in partnership with Petropars (19.9%), a 100% subsidiary of NIOC, and the Chinese state-held oil and gas company CNPC (30%).
The whole project is expected to cost US$5bn and Total will start the initial US$1bn investment when the US will extend the sanctions relief for Iran under the 2015 agreement. It will be developed in two phases and the first one is expected to cost US$2bn. It will consist of 30 wells and 2 wellhead platforms connected to existing onshore treatment facilities by 2 subsea pipelines. SP11 is expected to have a production capacity of 2 bcf/d (over 56 mcm/d or 400,000 boe/d) as of 2021. The produced gas will be fed into Iran's gas network for domestic consumption.
The North Dome Field/South Pars gas field is the largest in the world and is shared between Iran and Qatar, about 80-km north-east of Qatar's mainland. Its development on the Iranian side is divided into about 30 phases, 21 of which are active now. Phases 1-10 are intended for domestic consumption and injection into Iranian oil fields, while gas from the other phases should be exported.
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