Iran on Par with Qatar
Meshkinfam said that Iranian contractors have grown in the Iranian side of South Pars, while top oil and gas companies have been present in the Qatari side.
"But despite this [big gap], we are both on equal footing in daily recovery," he added.
Meshkinfam said that floating production storage and offloading (FPSO) had been installed in the oil layer of South Pars.
"With a wellhead platform and seven wells, 25,000 b/d of oil is being recovered from this layer, which is planned to reach 150,000 b/d," he said.
Meshkinfam also referred to the South Pars products, saying: "The completed South Pars projects are currently delivering 456 mcm/d of light gas to national trunkline. Meantime, 45 mcm/d of sour gas is being injected into oil fields."
Meshkinfam said gas condensate production from South Pars had reached 808,000 b/d. "The production of ethane, as the most important refined product with a value-added 200 times the gas, has reached 5 million tonnes a year."
Furthermore, he added, 7.9 million tonnes of liquefied petroleum gas (LPG) is produced for exports, while 3,750 tonnes a day of sulfur is being supplied.
Tough Winter
Meshkinfam said $72 billion had so far been invested in the South Pars development, adding that the project is estimated to cost a total $87 billion.
"All state organs have over the past 10 years shown cooperation for providing the necessary finance and national cooperation was seen for the South Pars development," he added.
Meshkinfam said accumulated gas production from South Pars had reached 1,162 bcm, adding: "If we consider 18 cents for each cubic meter of gas, the products would be valued more than $200 billion."
He also said that four platforms would be built and loaded out this winter. "Platform 14A has been built in ISOCIO (Bandar Abbas) Yard and will be transferred to its destination in January. On February 11, we plan the trial run of the first train of refineries of Phases 22-24. Later, three platforms built in SADRA Yard (Bushehr) will be moved towards destination," he said.
Meshkinfam also said that the first row of the refinery of Phase 13 is to come online on a trial basis before the end of the current calendar year on March 20.
Maersk Likely to Develop Oil Layer
Meshkinfam said that a number of companies were in talks for the development of the oil layer of South Pars gas field.
"But negotiations with Maersk [of Denmark] are progressing well and we hope to make good progress in coming months," he added.
Meshkinfam predicted that the second IPC-style deal would be signed with Maersk for the development of the South Pars oil layer.
Asked if there was any conflict of interests if Maersk is acquired by Total, he replied: "Maersk's tie-up with Total has yet to be finalized and at the moment Maersk is independent. Necessary arrangements have been made for possible merger between Maersk and Total. In fact if we reach agreement in technical and financial issues the Maersk-Total merger will cause no problem."
He said that the agreement for the oil layer development would be signed this calendar year if negotiations continued at its current pace.
Meshkinfam said Maersk had yet to choose its Iranian partner for the project, as required by Iran's foreign investment law.
The oil layer of South Pars, roughly 100 kilometers off Iran's Persian Gulf coasts, is located along Iran-Qatar maritime border. The oil layer is estimated to hold between 1.5 billion and 4 billion barrels of oil in place in its Madoud, Upper Dalian and Lower Dalian formations. The API gravity of oil in this field is approximatively 21.
No Problem Over Farzad B
Meshkinfam also touched on negotiations with an Indian company for the development of Farzad B gas field.
"The most important issue in the negotiations with the Indian company over Farzad B gas field is the purchase of gas from this field. They suggested that the NIOC purchases the gas extracted from this field, but due to sufficient gas in the country we don’t need the gas recovered from this field," he said.
Meshkinfam said Iran had no technical problem with the Indians over the development of this field.
He added that negotiations had also started with some other companies, including Russia's Gazprom, for the development of this field.
Farzad A and Farzad B gas fields, in Farsi block, are located along Iran-Saudi Arabia border and 15 kilometers from Farsi Island.
The offshore facilities of this project are located 100 kilometers from the coastal strip and onshore facilities are 80 kilometers east of Bushehr.
$20bn Needed for Sustainability
Meshkinfam said arrangements were under way for the sustainability of gas production from the South Pars field. He added that the priority for now was to boost pressure in the field.
Meshkinfam put South Pars production at upwards of 550 mcm/d the, which would reach 700 mcm/d when new phases have been developed.
"To avoid pressure fall-off in the South Pars reservoir in coming years, we have already made planning to sustain the production," he said.
Meshkinfam said that nearly $20 billion in investment was needed to guarantee the sustainability of gas production from South Pars.
He said that the POGC would concentrate its efforts mainly on the sustainability of gas production from South Pars over the coming 20 years.
South Pars, known as North Dome in Qatar, is jointly owned by Iran and Qatar. The Iranian side is 3,700 square kilometers, of a total 9,700 square kilometers.
South Pars holds 14.2 tcm of gas in place (8% of world's total reserves and 47% of Iran's proven gas reserves), 19 billion barrels of condensate, 7.5 billion barrels of crude oil in oil layers, and big volumes of helium.
SP11 Subcontracts
The manager of SP11 project also said subcontracts for the project are to be signed by the end of the current calendar year (20 March 2017).
Regarding platforms for Phase 11, Rasoul Fallahnejad said that six to ten months was needed for the basic design of platforms, choosing a consultant, carrying out environmental studies and taking care of preliminary affairs.
After that, he added, the process of bidding will start to choose subcontractors. That, he said, would take six to eight months.
"On average, 15 to 16 months after the signature of the main contract, subcontracts will be signed and executed," he said.
Fallahnejad said that Total would supervise equipping factories which would be set up by EPC companies to build jackets and platforms.
He said that technical packages have been submitted and financial packages have been examined.
"Given the country's financial conditions, after the opening of financial envelopes, the issues of transfer of hard currency, opening of banking accounts and banking guarantees would take time so that the parties would reach agreement on the mode of payment. After that, agreements will take effect," he added.
Fallahnejad added that plans were under way for the awarding of all subcontracts for Phase 11 before the end of the current calendar year.
He said that production was expected to start 40 months after the awarding of the contract; however, "we are already ahead of schedule."