70% of Petroleum Ministry Budget for South Pars
Accelerating the development of the supergiant South Pars gas field has become the central theme of Iran’s Petroleum Ministry. Full development of the offshore field shared with Qatar can bring about a major development in Iran’s national economy.
Petroleum Minister Bijan Namdar Zangeneh recently visited South Pars, the fifth time since taking office in August 2013.
On the sidelines of his tour of South Pars in Assaluyeh – known as Iran’s gas capital – the minister talked to Iran Petroleum.
Q: What do you think of the current status of development of main phase of South Pars?
A: A great deal of activities is under way in both offshore and onshore sections of these phases. Platforms 12B and 12C are expected to come on-stream in one month. The platforms of phases 11 and 18 are now ready to deliver gas to land. The gas from the platform of Phase 16 has already reached the refinery of this phase.
So far, two phases of the refinery of Phase 12 have become operational and the last phase is waiting for gas from the sea. The refinery of Phase 15 has come to a halt due to technical glitches, but will restart working along with the refinery of Phase 16 soon.
Sweet gas production in the first terrain of refinery of phases 17&18 is expected to start in a month.
Sweet gas production from South Pars is almost 80mcm.
Q: South Pars development is to be over in two to three years. What plans does Petroleum Ministry have for the field then?
A: South Pars gas field is unique in Iran’s petroleum industry. With the full development of this field in 29 phases, development of this field will continue qualitatively and within the framework of production preservation, refining and petrochemical projects.
Petroleum Ministry plans to refine gas condensate produced from all phases of South Pars and the investors for the construction of eight mini-refineries with a refining capacity of 480,000 b/d of gas condensate have been designated.
Q: You talked about mini-refineries. Have financiers of Siraf refining park project been selected?
A: The financiers for the construction of seven 60,000-barrel gas condensate refineries have already been selected and the investor for the eighth facility is being chosen.
Some 35 qualified groups voiced their readiness for the construction of eight gas condensate refineries and seven of them have been selected. Immediately after these gas condensate refineries are constructed, construction of new downstream units in these refineries will start in South Pars. There is a plan for using ethane and LPG produced in South Pars.
Q: How do you assess the current status of South Pars gas field?
A: Development of South Pars is going on within a reasonable and balanced management framework and its affairs are much better organized. Given the potentialities of Iran’s Petroleum Ministry, I think that the current management structure in this project can bring the project to fruition fast. At present, the jobs have been divided between the contractors and the outsourcer. The government and the parliament are both contributing to the development of this field so that the seven prioritized phases of South Pars will have been developed in 5 to 6 months.
By the end of the current calendar year, 100 mcm of gas will be fed into national trunklines from the prioritized phases. As promised earlier, production from South Pars would have increased by 200 mcm by the end of the next calendar year.
Q: How much is Iran’s petroleum industry investing in South Pars development?
A: More than 70% of the financial resources of Iran’s Petroleum Ministry go to this project. Next year, we will be able to make good on our promises for South Pars with the help of the government, the parliament and the National Development Fund of Iran.
Q: Iran is expected to introduce its new type of oil contracts in the coming months at a conference in London. How will Iran’s Petroleum Ministry act in light of extension of nuclear talks between Tehran and six world powers?
A: Our country will move ahead with its plans. Signature of contracts with foreign companies may be delayed, but signing contract with qualified domestic companies would face no restrictions after the new structure of oil contracts is finalized.
Q: Will Iran’s crude oil exports rise?
A: Nothing specific will happen in Iran’s oil exports before the nuclear talks are not concluded.
Q: What do you think of $70 oil price in next year’s budget?
A: This price estimate is defendable, but nobody can have a precise estimate of future oil prices in the world markets.
Q: The deadline for Pakistan to construct its own section of gas pipeline is expiring and it has to pay $200 million in penalties. How will Iran act?
A: We are in talks with Pakistan to that effect.
Q: Will you give Pakistan more time?
A: We have to reach conclusion in the talks with Pakistani sides.
Q: How much is Iran’s current oil production capacity?
A: Iran’s crude oil production capacity will reach 3.8 mb/d after the lifting of the sanctions.