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The expansion of gas production at South Pars, Iran’s largest and most important gas field, continued apace with the commissioning of two new phases in December. Output is set to carry on rising in 2016 as new phases are added and production from existing projects is ramped up.

The latest stages to be commissioned, phases 15 and 16, are yet to be officially inaugurated but are currently producing around 30-36 million cubic metres per day (MMcm/d). This will increase to their joint capacity of 50 MMcm/d of gas and 80,000 barrels per day of condensate over the next few months.

Phase 18 of South Pars was inaugurated in November and production will increase alongside Phase 17 over the next year to their combined capacity of 50 MMcm/d of gas and 80,000 b/d of condensate. “I assume that gas production in South Pars phases 17-18 will ramp up to the plateau level in early 2017,” Siamak Adibi, a senior consultant at Facts Global Energy, toldInterfax.

Production from Phase 12 will also increase this year. It is capable of producing 78 MMcm/d of gas and 110,000 b/d of condensate but is currently operating at 70% of its capacity. First production from Phase 19 is expected by mid-March. It will also be capable of producing 50 MMcm/d of gas and 80,000 b/d at capacity, but it is expected to produce 15-30 MMcm/d initially.

Several more phases are expected to be commissioned beyond 2016. Phases 20 and 21 may be completed in 2017 or 2018. Phases 22-24 are expected to be commissioned in 2020, while phases 13 and 14 could follow soon after that, according to Adibi. The development of South Pars’ phases has fallen out of chronological order as contracts have been cancelled and re-awarded, among other factors.

Upping the pace

Rising production from the South Pars field is the result of a concerted effort by Iran to prioritise the new phases and fast-track their development. “Iran has been able to develop the new South Pars gas projects with faster pace over the past few years,” said Adibi. “The current government has put higher priority to complete advanced projects by allocating more financial resources and/or manpower for those projects.”

South Pars supplies 72% of Iran’s gas needs, according to the Shana news agency. In the future, South Pars may also allow Iranian gas to be exported as LNG for the first time. Iran pipes gas to Turkey, Armenia and Azerbaijan, but it has aspired to expand into LNG exports for several years. Once the sanctions against the country are lifted, it may be able to reach deals with IOCs to fulfil its LNG ambitions.

France’s Total is rumoured to be in line for a contract to develop Phase 11, all of the gas from which would be exported as LNG. However, Total denies it is involved in negotiations with any Iranian authorities.

Phase 11 was initially included in a list of projects that was distributed by National Iranian Oil Co. in November, for which contracts would be tendered according to the new petroleum contracts regime. However, Phase 11 was subsequently removed from the list, leading some to speculate negotiations with Iran’s potential project partners are advancing.

Having originally selected China National Petroleum Corp. to develop Phase 11 several years ago before cancelling the contract, Iran is keen to see the project come to fruition. Should it go ahead as an LNG development, it may be followed by several others. “The gas projects that were introduced to the international oil companies during the IPC conference in Tehran in late November could be very attractive, especially for LNG exports,” said Adibi. “The problem is the flooding of LNG supply into the market over the next 5-10 years.”

Across the border

Rising gas production from South Pars is already worrying Qatar, which shares the field. Qatar has not yet indicated if it will review its self-imposed moratorium on additional production from the North Dome field (as it is known in Qatar), but it may be forced to reassess its policy if Iran continues to ramp up production on its side of the maritime border.

Greater activity on the Iranian side has also raised concerns in Doha that the risk of damage to the field is increasing. Qatar has offered assistance to Iran to develop its projects, saying it wants to ensure work is carried out to a high standard. However, Iran is yet to accept.

Tag(s) : #Oil and Gas News
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