Monday, May 12, 2008, Jamadi-ul-Awwal 5, 1429    

Iran to launch South Pars gas projects in July

Tehran—Iran said on Sunday that three belated gas projects in its giant South Pars field will go on stream from July. The state-run Pars Oil and Gas Company (POGC) also said that South Pars phases six to eight, after a nearly two-year delay, was expected to be fully operational by the end of the current Iranian year (March 19, 2009). “The first stage of the three phases will start production with 400 million cubic feet (11.32 million cubic metres) of gas per day in the (Iranian) month of Tir this year,” project manager Mohammad Javad Shams told reporters.
The month of Tir starts on June 21. The first stage aims to make phase eight operational in July, he said, adding that phase six would go on stream in autumn. Phase seven is “highly likely” to go on stream before the end of the current Iranian year, he added. The three phases will produce 104 million cubic metres of sour gas (3.6 billion cubic feet), 158,000 barrels of condensates and 4,450 tonnes of liquefied petroleum gas (LPG) on a daily basis.
“This is the country’s biggest gas development project. Each phase will yield around seven million dollars (4.5 million euros) per day,” Shams said. The development of the giant offshore field has been delayed amid a lack of investment in a country faced with severe gas needs of its own in winter at the same time as planning ambitious gas export projects to Asia and Europe.
“The increase of costs since 2003 that contractors have been facing all over the world was one of the reasons for the delay,” Shams said. The National Iranian Oil Company handed over the development project of phases six to eight to POGC under a buy-back contract in July 2000.
The project is a joint work by Iranian and foreign companies including Norway’s Statoil which has now merged with Norsk Hydro. “The Norwegian company has covered 15 percent of the project’s total capex (capital expenditure) of 2.68 billion dollars (1.73 billion euros),” Shams said.
A Korea-Japan-Iran consortium has built an onshore gas refinery. Gas from the three phases is mostly slated for injection in oil fields of the southern province of Khuzestan to compensate low pressure which cuts the oil recovery rate. The South Pars gas field in the Gulf with around 500 trillion cubic feet (14 trillion cubic metres) of gas holds about eight percent of the world’s gas reserves.—AFP