Iran Signs Contracts for South Pars Gas Field Pressure-Boosting Project

Iran's Oil Ministry has signed agreements with domestic contractors to boost pressure in the South Pars/North Dome gas field, in the Persian Gulf, that accounts for the major part of the country’s gas output.

The contracts were signed between Pars Oil and Gas Company, a subsidiary of the Iranian Oil Ministry, and Petropars, Oil Industries Engineering and Construction (OIEC), Khatam al-Anbiya Construction Headquarters, MAPNA Group and an Iranian consulting firm, the Oil Ministry's Shana News Agency reported on March 10.

Based on the contracts, $20 billion will be invested in the project to extract 90 trillion cubic feet of gas and 2 billion barrels of gas condensates, which will generate $900 billion in revenue.

The South Pars gas field, known as the North Dome in Qatar, is the world's largest natural gas field located in the waters between Iran and Qatar. Qatar is also installing platforms to boost pressure in the field.

The gas field holds an estimated 1,800 trillion cubic feet (51 trillion cubic meters) of in-situ natural gas and some 50 billion barrels (7.9 billion cubic metres) of natural gas condensates.

Managing Director of the National Iranian Oil Company (NIOC) and Deputy Oil Minister Mohsen Khojasteh-Mehr said during the signing ceremony that 38 platforms, for production and logistics, are operating in the South Pars gas field and 14 pressure-boosting platforms will be used for carrying out the project.

According to Iran’s Oil Minister Javad Owji, the pressure-boosting platforms will start their operations in the next four years.

The South Pars field holds 50 percent of Iran’s gas reserves, meeting 70 percent of the country’s gas needs and supplying 45 percent of domestic oil refineries’ feedstock, the oil minister said, adding that extraction from the joint field will continue for 70 years after the pressure-boosting platforms are put into operation.

In mid-August 2023, Iran announced the start of production from phase 11 of South Pars, which is the final phase of the massive gas field and is strategically important because it is the closest phase to Iran's maritime border with Qatar.

Development of phase 11 took more than 20 years due to delays caused by both Iranian and foreign companies. Production at phase 11 is expected to peak at 56 million cubic meters a day in 2044.

In 2017, France's Total led a consortium that included China National Petroleum Corporation (CNPC) and Iran's Petropars to develop the phase. However, the deal collapsed after the US withdrew from the 2015 nuclear deal (JCPOA) in 2018 and re-imposed sanctions.

The South Pars field, shared between Iran and Qatar, is the largest gas field in the world, covering 9,700 square kilometers of the two countries’ territorial waters in the Persian Gulf. Recent years have seen collective output from the field reach approximately 1.4 billion cubic meters per day.