SP Output to Grow 84mcm/d
Irans Petroleum Ministry, under President Hassan Rouhani, inaugurated 11 conventional phases of the giant South Pars gas field (12, 15, 16, 17, 18, 19, 20 and 21) without any foreign help.
Iran"s Petroleum Ministry, under President Hassan Rouhani, inaugurated 11 conventional phases of the giant South Pars gas field (12, 15, 16, 17, 18, 19, 20 and 21) without any foreign help. That raised South Pars gas output from 240 mcm/d to 570 mcm/d. Development of these phases under sanctions inflicted higher costs on Iran"s petroleum industry and took more time than normal; however, it kept Iran"s petroleum industry development running.
Now, Petroleum Ministry targets operation of SP 13, 22-24 and part of SP14 by next March. The pace of work in these phases shows that within seven months, South Pars would add 84 mcm/d of gas to Iran"s output.
A glance at performance of Petroleum Ministry in the two administrations of President Rouhani in the South Pars development shows a 2.4-fold increase in gas production from the giant offshore reservoir over three and a half years only.
Many experts insisted that the South Pars mega project could not be developed without foreign help, but the field was developed and Iran"s production level is equal to that of Qatar. The two countries jointly own South Pars.
SP12, Biggest in South Pars
SP12, which equals three standard phases, was the first one to come online under the Rouhani administration without foreign contractors" help. It came on-stream in March 2015 by Iran"s Petropars. The startup of this megaproject boosted Iran"s Gross National Product (GNP) by three percent. Production from SP12 earned Iran an extra $17.5 million in daily revenue.
SP12 development is supposed to produce 57 mcm/d of natural gas, 110,000 b/d of gas condensate, 600 tonnes a day of sulfur plus 10 million tonnes a year of liquefied natural gas (LNG).
On inauguration day, Minister of Petroleum Bijan Zangeneh described SP12 as the most Iranian-made phase of the supergiant gas field mainly because Iranian engineers and technicians were fully involved in its design, engineering, commodity supply, manufacturing and startup.
Platform Launch Record Smashed
One year after the inauguration of SP12, SP15 and SP16 came online in January 2016. SP15&16 was aimed at the producing 50 mcm/d of sweet gas, 80,000 b/d of gas condensate, 1 million tonnes a day of LPG, one million tonnes a day of ethane and 400 tonnes a day of sulfur. Iranian companies managed to set a new gas-out record due to their performance in SP15&16. Norway"s Statoil had earlier registered a 6.5-month gas-out record, which was overruled by Iranian companies which set a five-month-and-ten-day record in SP16.
With the inauguration of SP12, SP15&16 during the first two years of the 11th administration, the South Pars gas output increased 130 mcm/d.
The development of these phases was in coincidence with the time Iran"s petroleum ministry was still struggling with financial shortages and Iran"s nuclear talks with six world powers had yet to be concluded. However, South Pars development and investment in the petroleum industry were never halted.
6 Phases Operational Simultaneously
Six standard phases of South Pars (SP17, 18, 19, 20 and 21) were inaugurated simultaneously in April 2017. It initially seemed impossible to inaugurate all these phases at the same time, but Iranian contractors proved their ability to do so despite all restrictions. Although the development of South Pars needs the capital and technological knowhow of foreign companies, Iranian petroleum industry will not wait for foreign companies for good.
Three and a half years into the tenure of the 11th administration, 11 phases of South Pars gas field became operational, letting Iran start recovery from 21 phases in total to reach Qatar in production from the offshore reservoir. Iran"s production and refining capacity increased in South Pars from 240 mcm/d in 2013 to 570 mcm/d in April 2017. Furthermore, rich gas recovery from South Pars totaled 1.24 bcm in 2017.
In July 2017, the National Iranian Oil Company (NIOC) signed a $4.8 billion contract with a French energy major Total-led consortium comprising also China"s CNPC and Iran"s Petropars for the development of SP11. The contract, which was based on the newly developed IPC model, was aimed at rfeaching an output of 56 mcm/d. Under this contract, two offshore compressing platforms, whose cost will be calculated separately at $2.5 billion, will be built.
Cases of natural gas flow decline in the South Pars blocks, which would lead to a decline in gas production in coming years, prompted the Ministry of Petroleum to attract foreign investment for the development of SP11 and use technology for the compressing platforms, each weighing 20,000 tonnes, because Iranian contractors did not possess such knowhow to build the platforms.
The Total-led consortium spent nearly $90 million on the project, and some bidding rounds were held.
However, US President Donald Trump pulled out of JCPOA which terminated sanctions imposed on the Islamic Republic. Total said it would seek waiver from the US to continue with its presence in Iran. Iran"s Minister Zangeneh gave Total 60 days to make up its mind about operating the project.
As Iran Petroleum went to press, Total had yet to release an official report regarding its probable pullout from SP11.
In case Total quits, the project will go ahead under the leadership of CNPCI and if the Chinese company pulls out too, Petropars which has already developed SP12 and SP19, will continue developing the gas field.
"Development of SP11 is envisaged in two stages; first includes production of natural gas, drilling of wells, and construction of a platform to carry gas onshore. Petropars will have no problem with this part," said Mohammad Meshkinfam, CEO of Pars Oil and Gas Company (POGC).
"But," he added, "We will face some problems regarding the construction of compressing platforms whose technology does not exist in Iran."
SP11 development activities are under way and Iran has decided not to wait for foreign companies as it did not for many other phases.
The best option would be to use foreign capital and to transfer technology into the country; however, experience has shown that Iran"s petroleum industry will go ahead with its development with or without foreign help. However, this trend of activity may alternate between fastness and slowness.
Six Platforms in 2018
Although the US has stepped up its threat of unlawful and unilateral sanctions against Iran"s petroleum industry, the Iranian Ministry of Petroleum still prioritizes SP13, 14, 22, 23 and 24. Six more platforms of South Pars are on the POGC agenda by next March. Meshkinfam has said that South Pars gas production capacity would increase by 84 mcm/d by that time.
Given the arrangements made, installation of Platform 14B will allow gas recovery from SP14. Two gas sweetening trains of SP13 and one sweetening train of SP22-24 are currently operational and the second train of gas sweetening in SP22-24 is to come on-stream soon. That means completion of SP13 and SP22-24 by next March, which marks the turn of Iran"s calendar year.
The significant role of South Pars development in the development of Iran"s economic, social and political infrastructure is no secret to anyone. To highlight the significance of development of this field, it would be enough to note that with $40 a barrel of crude oil, the South Pars gas would be valued at $4,400 billion. Iran"s revenue from crude oil exports and sales stand at below $80 billion even with a barrel of oil at $100.
After two decades of efforts and spending of $70 billion, development of South Pars is approaching its final stages. The development of the field has had over 85% progress and except for SP11, all other phases would have been developed over the coming one and a half years.
By imposing unlawful and unilateral sanctions against Iran"s petroleum industry, the US thinks it could halt the development of this industry and impose an embargo on Iran"s oil sales in the global markets. The Trump administration may not recall that even under the tough international sanctions imposed on Iran in 2010, Iran"s petroleum industry pushed ahead with its development.
Courtesy of Iran Petroleum