French oil and gas company Total will return to Iran through an agreement with the National Iranian Oil Company (NIOC) for the development of phase 11 of the South Pars gas field in the Persian Gulf, according to the French company.
The world's largest gas field, the South Pars 11 project, will have a production capacity of 51 million cubic meters (1.8 billion cubic feet) per day, or 370 000 barrels of oil equivalent per day. The produced gas will be fed into Iran's gas network.
According to the company, the South Pars 11 project will be developed in two phases. The first phase, with an estimated total cost of around $2 billion will consist of 30 wells. At a later stage, a second investment phase, involving the construction of offshore compression facilities, will be launched once required through the reservoir conditions.
The French company will operate the project with a 50.1 percent share. The NIOC's subsidiary Petropars and the Chinese state-owned oil and gas company CNPC will have 19.9 percent and 30 percent stake, respectively.
"Following Total's successful development of phases 2 and 3 of South Pars in the 2000s, the Group is back to Iran to develop and produce another phase of this giant gas field," Patrick Pouyanne, chairman and the CEO of Total said.
"Total will develop the project in strict compliance with national and international laws and looks forward to working alongside the Chinese state-owned company CNPC in this additional international partnership. This project fits with the Group’s strategy of expanding its presence in the Middle East, where the origins of the Group lie, and growing its gas portfolio by adding low unit cost, long plateau gas assets." Pouyanne added.
Under the terms of the agreement, NIOC and the project partners will conduct exclusive negotiations to finalize a 20-year contract in accordance with the technical and economic terms established in the agreement, within the framework of Iranian Petroleum Contract (IPC) recently approved by the Iranian Parliament.
"In parallel, Total will launch engineering studies and a call for tender process so that construction contracts can be awarded immediately upon signature of the final agreement," according to the statement.
(Anadolu Agency)
