Countdown in South Pars
Thousands of Iranian oil and gas industry staff have been mobilized since the start of the year in March to help raise Iran’s gas production by 100 mcm/d. For this purpose, they have been working round the clock and under very tough ecological and geographical conditions in order to install facilities for extraction, transmission, refining and injection of gas into national trunklines in the Persian Gulf waters. Accelerating development of South Pars, shared by Iran and Qatar in the Persian Gulf, is the main concern of Iranian petroleum industry officials. This issue is now more than an industrial project in Iran because full development of South Pars will significantly change national economy and improve livelihood of Iranian people.
Meaningful relations between development of South Pars gas field and development of economic, social and political infrastructure in Iran are no secret to anyone. South Pars is estimated to have hidden around $8,800 billion in hydrocarbon reserves. Iran is earning less than $80 billion from crude oil sales a year.
Iran is currently recovering more than 300 mcm/d of gas from South Pars and Petroleum Ministry plans to bring its production from this jointly operated field to 800 mcm/d in two years. So far, 10 of 24 phases in South Pars have been developed and the remaining phases are being developed fast.
South Pars is one of the largest gas reservoirs in the world. Its development has been put on hold due to international sanctions and mismanagement in recent years.
Since taking office in August 2013, Petroleum Minister Bijan Namdar Zangeneh has laid the blame on mismanagement for the delayed development of the field. He said in the beginning that development of South Pars will continue based on priorities. Phases 12 and 15-18 of South Pars have been among the prioritized phases of South Pars. Phase 12, which is the main phase, is 90% complete. Other phases have progressed 50% to 60%.
Currently, Iranian Petroleum Ministry is spending more than 60% of its time and energy on completing the remaining phases of South Pars for faster startup of the giant offshore reservoir. Phase 12 is an exceptional one among prioritized phases. It is currently feeding on average 81 mcm/d of natural gas into national trunklines, in addition to producing 120,000 b/d of gas condensate and 750 tons a day of sulfur for exports. Such a valuable asset naturally occupies minds of petroleum industry administrators.
98% Progress in Phase 12
Phase 12 of South Pars, now 98% complete, is the most important one among others. So far, five terrains of this phase have started work.
Rasoul Fallahnejad, manager of Phase 12 development, has said that this phase would be feeding at least 60 mcm/d of more gas into national trunkline before March next year.
The second and the third platforms of Phase 12 have become operational. Platform 12A of this phase was launched offshore to deliver at least 1 bcm/d of sour gas onshore. So far, more than 6.2 million barrels of gas condensate produced in Phase 12 has been refined and exported. With the startup of platforms 12B and 12C, the volume of gas condensate production will increase and every 10 to 20 days, gas condensate will be exported from this phase regularly.
The refining capacity of Phase 12 refinery has increased from 25 mcm/d to 60 mcm/d as it has been connected to Iran Gas Trunkline-5 (IGAT-5). Therefore, as gas processing in this refinery increases, restrictions on gas supply to power plants will shrink during winter.
The contract for the development of Phase 12 was signed for $7 billion with a domestic contractor in August 2005. It was supposed to come online in March 2015, but due to a variety of reasons, including sanctions, this project could not progress above 90%. However, after President Hassan Rouhani took office in August 2013, Petroleum Ministry focused on this phase. Over the past one year, significant progress has been made in this phase, like the startup of the first offshore platform and three terrains of refinery of this phase.
Economists believe that the startup of each phase of South pars will increase Iran’s gross domestic product (GDP) by one percent. But full operation of Phase 12 will boost GDP by three percent.
Iran’s petroleum industry has been under international sanctions for years, but platforms 12B and 12C are to be launched officially soon.
Statoil Record Smashed
The delivery of the first cargo of sweet gas produced in Phase 16 to national trunkline started recently. The cargo was 7.5 mcm. Now, the startup of the fourth terrain of sweetening in the refinery of phases 15&16 of South Pars is providing 60 mcm/d of gas, which is expected to increase shortly.
After the start of gas production in Platform 16A, Iranian companies have broken the record of gas-out operations, which was recently held by Norway’s Statoil in phases 15&16. The minimum time span recorded for gas-out by Statoil was six months and a half, but Iranian companies cut it to five months and ten days in Phase 16. Hookup, pre-startup and startup operations have already been done. Gas injection into national trunkline has already been done and production from Phase 15 is set to start soon.
The objective of this project is extracting 56 mcm/d of sour gas from the main reservoir of South Pars and producing 50 mcm/d of sweet gas, 77,000 b/d of gas condensate, 2,900 tons a day of liquefied petroleum gas (LPG), 2,750 tons a day of ethane for feeding petrochemical plants as well as 400 tons a day of sulfur. This phase incorporates a main four-legged jacket, a wellhead platform, two three-legged jackets, two connection bridges, two middle platforms and a flare. They weigh 7,200 tons altogether. In this project, 99.9% of equipment and facilities of platform have been constructed by South Pars Gas Complex.
The contractors developing phases 15&16 of South Pars are Iranian Offshore Engineering and Construction Company (IOEC), Iran Shipbuilding & Offshore Industries Complex Co. (ISOICO), Iran Offshore Industries Company and Dana Kish Drilling Company. Construction of refining units and preparation of the main site are up to Arya Naft Shahab Company.
Phases 17&18
The first platform in phases 17&18 of South Pars has been launched and its installations have started operation. The first terrain of sweetening in the refinery of this phase is also expected to come online soon with a daily capacity of 10 mcm. The capacity of this terrain will double by March next year.
Currently, less than 10 foreign engineers are working in phases 17&18 for installing equipment purchased from abroad. Earlier, more than 2,000 foreigners were needed in the pre-startup operations.
By operating two refining units in phases 17&18 of South Pars, gas production from these phases will reach 25 mcm/d. Platform A17 is operational, while satellite platforms are under way with more than 60% progress.
Full operation of phases 17&18 of South Pars, excluding two satellite platforms, will earn the country $10 million a day. Therefore, a $6.2 billion investment in this project will return in two years.
Iranian contractors and companies have handled 90% of engineering, 100% of construction and 50% of material supply in these two phases.
Development of prioritized phases of South Pars is picking up speed as the country braces for cold snap. Different phases of this giant gas reservoir are operating and the flares of these phases have been turned on. Full development of phases of South Pars will supply the country’s energy needs sustainably and increase the country’s revenues by $112 billion annually.
Given the vital role of South Pars in energy supply and revenue generation in the country, faster development of this gigantic gas field has become a top priority for Iran’s Petroleum Ministry.
To that effect, phases 12, 15&16 and 17&18 are prioritized phases and they have received a big budget allocation.
As gas production from South Pars increases this year, Iran will make plans for supplying fuel during winter and saving liquid fuel consumption in power plants and other energy-intensive industries.