SHANA — The load-out of Platform 11B’s jacket in the massive offshore South Pars gas field started on April 30 for final installation along Iran-Qatar border. That marks the beginning of development of Phase 11 of South Pars by Iran’s Petropars.
Hamid-Reza Masoudi, CEO of Petropars, had earlier said that recovery from SP11 would begin in July 2021.
The agreement for developing SP11 was initially signed in July 2017 for $4.8 billion National Iranian Oil Company (NIOC) and a Total-led consortium comprising China’s CNPCI and Petropars. The French firm made necessary preparations and held tenders for the project, but the US’s unilateral withdrawal from the 2015 Iran nuclear deal and re-imposition of sanctions on Iran pushed Total and CNPCI to quit. Given the significance of development of SP11, the project was assigned to Petropars.
Start of SP11 Development
Masoudi said with the load-out of the jacket in Platform 11B, development of SP11 has officially begun.
The agreement for the SP11 development project was initially signed under a buy-back framework in the final years of the 10th administration in office, but due to oil sanctions, any financing of the project was impossible.
Under the Rouhani administration, an international consortium was set up to develop this phase, but the US’s extraterritorial sanctions once more blocked the project.
Total and CNPCI had to pull out of the project for fear of US penalties. President Donald Trump has toughened sanctions against the Islamic Republic, particularly the petroleum industry. However, the Petroleum Ministry has always said the idea is to make maximum recovery from South Pars.
Rasoul Fallahnejad, director of engineering and construction at Pars Oil and Gas Company, has said that SP11 development started later than other phases because development of other phases had already begun and the country was faced with gas supply shortages alongside financial shortcomings.
Why SP11 Wasn’t Prioritized in 2013
When Hassan Rouhani was elected president in 2013, Iran was recovering 280 mcm/d of rich gas from South Pars. In a bid to make up for Iran’s backwardness in recovery from this jointly-owned gas field, the Petroleum Ministry divided the South Pars phases based on priorities so that the phases with higher progress would be prioritized. The objective was to meet winter gas demand and provide necessary finance for other development phases.
Therefore, SP12, SP15 &16 and SP17&18 were prioritized due to the level of progress in their development. SP11 had not been developed sufficiently by that time and the Petroleum Ministry lacked sufficient financial resources for that purpose. Therefore, it was not prioritized.
Finally, in July 2017, an agreement was signed with a consortium comprising France’s giant Total, China’s CNPCI and Petropars. One reason forwarded by the Petroleum Ministry for this agreement was to officially launch the newly-developed model of oil contract – Iran Petroleum Contract (IPC), while using foreign finance and foreign technology for building pressure compressor platforms in a bid to prevent pressure fall-off in this gas field in coming years.
SP11 is being developed to produce 2 bcf/d of gas, or 56 mcm/d of rich gas. NIOC had predicted that the field would experience a pressure fall-off as soon as production starts. Therefore, designing and building gas pressure compression installations was put on the agenda.
The reason for which the Petroleum Ministry insisted on signing this agreement with an international consortium was that in neither of South Pars phases, had gas compression installations been designed and built earlier and Iran had never used best-at-class technologies for that purpose. Therefore, the agreement for SP11 development was signed with international firms with a view to transferring technical knowhow for designing and building gas pressure compression installations.
Mohammad Meshkinfam, CEO of POGC, had said that due to potential pressure fall-off in South Pars in coming years, NIOC would consider designing, building and installation 20 gas compressors in various phases of this gas field. He had also said that SP11 would serve as a model for other phases of South Pars in terms of technology transfer.
However, international parties to the SP11 agreement pulled out due to US threats. But due to the significance of recovery from this field, Petropars volunteered to operate the project for the recovery of 56 mcm/d in the first stage of development.
Rasoul Fallahnejad, who heads SP11 development, said the development of SP11 had started following the exit of foreign companies for protecting Iran’s natural right to extract gas from this phase.
First Well in 2021
Masoudi has said the wellhead jacket of the first top drive in SP11 would be installed in late June if no weather-related problem arises.
He said that drilling would get under way for five wells after the installation of this jacket, adding that recovery from SP11 would start in 2021.
Petropars began preliminary work for developing SP11 in October and Masoudi said it was determined to go ahead.
Platform 11B’s Jacket Installation
Fallahnejad said the wellhead jacket of Platform SPD11B is one of the two jackets envisaged for SP11. Installing SPD11B would allow the drilling of 12 wells along Iran-Qatar border in the Persian Gulf waters.
He said that after bracing operations and transfer of this structure to the SP11 location, installation of SPD11B by Sadaf would have been done by June to make preparations for drilling.
One day prior to the jacket load-out, Minister of Petroleum Bijan Zangeneh said in a tweet on the occasion of Persian Gulf Day: “Iran is at the height of power in the Persian Gulf thanks to maximum recovery from the South Pars gas field. The Persian Gulf is a national history, an identity for every Iranian and a safe haven for its neighbors.”
Iran is currently recovering more than 700 mcm/d of gas from South Pars which it shares with State of Qatar in the Persian Gulf.
Courtesy of Iran Petroleum