South Pars Phase 16 Comes On Stream

Iran announced that the Phase 16 of the country’s giant South Pars gas field has become operational, supplying its first delivery of 7.5 million cubic meters (mcm) of sweet gas on Friday.

Phase 16 and the related Phase 15 are projected to eventually yield 57 mcm (2 billion cubic feet) of natural gas and 75,000 barrels of gas condensate per day. A number of gas desalting installations still need to be operational.

The South Pars/North Dome Field is the world’s largest gas field, shared between Qatar and Iran.

File photo: Horizon of Persian Gulf in South Pars (Wikipedia)

Iran's Oil Minister Arrives at South Pars – ‘Highest Priority’

Iran’s Oil Minister Bijan Namdar Zanganeh said today the development of South Pars Gas Field is of the highest priority. He made the remarks in Tehran before departing for South Pars, which is located in Asalouyeh, a port city in the Persian Gulf.

“The Oil Ministry is trying to put the completed phases of South Pars into service as we urgently need these joint fields given the country’s need for gas,” Zanganeh said. (IRNA/Press TV, 22 August)

The huge South Pars gas field is shared by Iran and Qatar. The larger field covers an area of 9,700 square kilometers, 3,700 square kilometers of which are in Iran's territorial waters (South Pars). The remaining 6,000 square kilometers, referred to as the North Dome, are in Qatar's territorial waters.

The Iranian gas field contains 14 trillion cubic meters of natural gas, about eight percent of the world's reserves, and more than 18 billion barrels of LNG resources.

File photo: A plant at Iran's South Pars Gas Field (IRNA/Press TV)

Five South Pars Phases To Come on Stream

Iranian Oil Minister Rostam Qasemi told reporters today in Tehran that five phases of the South Pars gas field will come on stream by the end of September despite U.S. sanctions against Iran. Qasemi added that a large proportion of equipment required for the development of 17 phases of the giant gas field is now being supplied by domestic manufactures. (IRNA/Press TV, 5 July)

The South Pars gas field is located in the Persian Gulf straddling the common border between Iran and Qatar. It is estimated that the field contains 14 trillion cubic meters of gas and 18 billion barrels of condensates. The gas production projects in Iran’s Pars Special Economic Energy Zone have been divided into 28 phases

Photo credit: Iranian Oil Minister Rostam Qasemi (IRNA)

Discovery of Huge Helium Reserves at South Pars

Iran’s Pars Oil and Gas Company (POGC) announced today that it has discovered the world's biggest helium reserve in its South Pars gas field. POGC estimated the volume of South Pars helium reserves at 10 billion cubic meters, approximately 25 percent of the world’s known reserves [Mehr News Agency, 30 September]. The South Pars gas field is shared by Qatar and Iran. Qatar is already producing some helium. The US is the world's leading supplier of helium, followed by Algeria.

The world’s annual production of helium is approximately 200 million cubic meters. The main use of the gas is in cryogenic applications, particularly in the cooling of superconducting magnets in MRI scanners. Helium is also the gas of choice to fill airships and blimps.

File Photo: A South Pars refinery in Asalouyeh, Iran. Mehr Photo

Chinese Oil Companies Delaying Iran Projects

Iran Warns Largest Chinese Oil Company of Losing Its $4.7 Billion Contract

CNPC, China's biggest state oil and gas group, has been warned by Iran to speed up work at the giant South Pars natural gas field or risk losing the multi-billion-dollar deal.

Ahmad Qalehbani, deputy minister of oil, told reporters in Tehran that the Chinese are delaying development work on the phase 11 of the South Pars gas field, phases. Qalehbani said as a result of the delays, CNPC is on the verge of losing its contracts to Iranian firms [Mehr News Agency, 2 September]. The CNPC contract was signed in 2010 and is worth $4.7 billion.

China’s second largest oil and gas company, the Sinopec Group, has also delayed the start date of the $2 billion Yasavaran oil field development. In late 2010, CNOOC, China’s third largest oil company pulled its team from North Pars gas venture.

The behavior of China’s three largest oil and gas companies cannot possibly be coincidental and must reflect the current strategy of the Chinese leadership toward Iran. Even though China had recently accelerated its purchase of the Iranian crude, but it appears to be hesitant to start or complete development work in Iran’s oil and gas fields. This hesitancy is a direct result of China’s eagerness not to challenge or offend the US and its sanctions against foreign investments in Iranian oil and gas sector. The crude oil purchase, however, is not subject to those sanctions and hence China’s willingness to increase its purchases.

Loss of Chinese largest firms as investors in developing oil and gas fields in Iran could cause serious problems for the country’s oil industry, especially considering that not long ago China was probably the last major economy left that was willing to ignore US sanctions on investments.

Iran, Iraq and Syria Sign Natural Gas Agreement

Iranian Natural Gas to Iraq and Syria and On to Europe

Iran, Iraq and Syria on Monday signed a natural gas contract for the transit of Iranian natural gas from the country's South Pars field via a 5,000-kilometer pipeline to Iraq and Syria, and from there to Lebanon and the Mediterranean Sea and Europe.

The 10-billion-dollar agreement, said to be the biggest in the Middle East, was signed by Iran's Acting Oil Minister and Oil Ministers of Iraq and Syria [IRNA, 25 July].

Iraq, Syria and Lebanon will use between 30 to 40 million cubic meters of the natural gas daily between now and 2020. The pipeline daily capacity will be 110 million cubic meters. The project will take three to five years to be completed.

Iran to Start LNG Production

Iran is considering switching to liquefied natural gas (LNG) for natural gas exports. LNG is the most popular form of natural gas transportation in the global market. Iran Liquefied Natural Gas Co. said it aimed to start LNG exports by the end of 2012 [Bloomberg, 13 April].

Iran’s South Pars gas field in the Persian Gulf share the same structure as Qatar’s North Field; together the largest natural gas structure in the world. Qatar has already started producing LNG and today is the world’s largest exporter of LNG in the world.

Khamenei Visits Asalouyeh

Ayatollah Khamenei (center) Visiting Phase 15 Construction Site, Asalouyeh. 28 March

Iran’s Supreme Leader Ayatollah Ali Khamenei today visited the country’s South Pars facilities in the Persian Gulf port of Asalouyeh. The South Pars together with North Dome field on the Qatari side of the Gulf constitute the largest natural gas field in the world. Asalouyeh is the closest land point to the field, which contains half of all Iran’s natural gas reserves.

Over the years Iran has built various plants and refineries in Asalouyeh. The original development plans had envisioned the completion of 27 phases, with some 28 refineries and 25 petrochemical complexes plus other light and heavy industrial plants. Out of these, 10 refineries and 7 petrochemical plans have been completed. Khamenei today visited Phase 15, which is the latest phase under construction.

In the past year, because of the US and EU sanctions, the Western companies have left Asalouyeh. Their technical expertise and investments was key to the completion of the remaining phases of the development and the overall operation of the existing phases. Iran’s IRGC has set up various business companies to replace the international oil and gas giants and Iran has signed an agreement with the Chinese for additional support, but it is highly unlikely that IRGC and the Chinese companies would be able to provide the level of technology required for such complex projects. The most likely outcome would be the work on the simplest projects and shelving the future phases for now.

Meanwhile, Qatar has established the most extensive and modern liquid natural gas (LNG) plants in the world to exploit the gas field from its side across the Persian Gulf. That country’s natural gas exports are now all in the form of LNG, making Qatar the world’s largest supplier of the sought-after liquid gas.

Photo: IRNA

IRGC Receives South Pars Gas Contract

Iran’s IRGC has been awarded the rights to develop the latest phases of the giant South Pars natural gas fields in the Persian Gulf. South Pars is Iran’s largest gas field. Together with the adjoining Qatar’s North Field, they are the world’s largest.

The Revolutionary Guards' business arm, Khatam al-Anbiya Base, received the lucrative contract after Royal Dutch Shell and Respol YPF decided not to move forward on South Pars development.

Khatam al-Anbiya is under UN sanctions related to Iran’s nuclear program. Shell and Respol withdrawal from South Pars represent the hesitancy of global energy majors to doing business with Iran.