No technical failure in South Pars Phase 12

The delay in the inauguration of the main development phase of the supergiant South Pars gas field is due to President Hassan Rouhani’s overloaded schedule, a senior official says, denying any technical failure.

“The postponement of the inauguration of Phase 12 of South Pars had no technical reasons…The president had to inaugurate this phase and due to his obligations his schedule changed,” Ali Akbar Shabanpour, managing director of Pars Oil and Gas Company (POGC) which administers South Pars, said.

Phase 12 development of South Pars, which is jointly operated by Iran and Qatar, was initially expected to start up last Saturday.

Complicated Phase

Shabanpour said Phase 12 development became complicated in its final stages.

He said the new management team at POGC has paid contractors based on progress in the project.

He said an oil platform is now being launched less than five months after its installation while that used to last 13 to 14 months.

Noting that POGC owes nothing to any of contractors for Phase 12, Shabanour said the sums paid to contractors in the past one year and a half has been spent on the project.

He said the construction of the fourth offshore platform of Phase 12 is the last step in the development project.

Shabanpour said Phase 12 supplied 66 mcm/d of gas during winter. “This phase…made great contribution to winter fuel supply,” he said.

Shabanpour said the infrastructure, installation of equipment, connections and cable laying, installation of rotary equipment and instruments, pre-commissioning and commissioning are the steps taken for every phase development. He said the most complicated part is in the final 10% of each phase development.

Shabanpour said based on the initial contract with Petropars Company, domestic manufacturing had a 51% share. He added that this percentage has now reached 66.

He expressed regret that work on the project was slowed down between 2005 and 2009.

Shabanpour said $7.3 billion has so far been spent on Phase 12, adding that the project has earned the country $1.6 billion over the past one year.

He said Phase 12 is estimated to bring Iran $17 million in revenues every day.

Gigantic Gas Reservoir

South Pars holds 40% of Iran’s gas reserves. This reservoir, sprawling on 3,700 square kilometers, contains 14.2 tcm of gas and 19 billion barrels of gas condensate. The offshore reservoir can earn the Islamic Republic several trillion dollars in revenues.

Over the past century, Iran has gained $880 billion from crude oil exports. At today’s price of $50 a barrel, Iran’s 100-year revenues from oil sales would become $3.6 trillion, which is still lower than the $4.4 trillion estimated for South Pars.

If the gas recovered from South Pars is converted into other products to feed petrochemical industries, the earnings will be 10-fold higher. Coupled with revenues from South Pars oil layer, the real value of this national asset will become highly significant.

This gas reservoir is instrumental in boosting Iran’s national, regional and international status. Despite all sanctions and financial restrictions, Iran has managed to add around 100 mcm/d to its gas output from South Pars. Consequently, Iran’s gross national product will grow remarkably and that would be a big achievement for Iran’s economy.

Phase 12 development of South Pars is supplying more than 50 mcm/d of gas. Inauguration of this phase will allow the extraction of 3 bcf/d of sour and sweet gas. Furthermore, 120,000 b/d of condensate (more than 34 million barrels a year) and 750 tons of granulated solid sulfur will be produced from this phase. Therefore, Iran’s gas condensate production will grow more than 22% and its gas production more than 16% year-on-year.