Total has signed an agreement with the National Iranian Oil Company (NIOC), national iranian, the contract for the development and production of phase 11 of South Pars (SP11), the largest natural gas deposit in the world. The production capacity of the project is 2 billion cubic feet per day, or 400,000 barrels of oil equivalent per day, including condensate. The gas produced is intended to supply the domestic market of iran from 2021.
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This contract, for a period of 20 years, is the first Iranian Petroleum Contract (IPC) and incorporates the terms of technical, contractual and commercial of the protocol of agreement signed on November 8, 2016. Total is the operator and owns a 50.1% interest, alongside the national company of chinese CNPC (30%) and Petropars (19.9 per cent), a 100% subsidiary of the NIOC. “This is a major contract for Total, which marks officially our return to Iran to write a new page in the history of the partnership that our Group has built with this country. We are proud and honored to be the first international company to sign an IPC, which provides a framework attractive business, following the conclusion of the international agreement on the nuclear (JCPOA) in 2015 and thus contribute to the development of relations between Europe and Iran. Total will implement the project in compliance with the most strict national and international laws, ” commented Patrick Pouyanné, ceo of Total. “This project fits in with the strategy of Total to strengthen its presence in the Middle East and complement its portfolio of assets, including gas, at low technical cost and at long plateau of production.”
The development of SP11 will be implemented in two phases : the first phase, an amount estimated at $ 2 billion equivalent, will see the drilling of 30 wells, construction of 2 platforms and the installation of two connecting lines to treatment facilities on land already existing. Later, when this will be made necessary by the conditions of the deposit, with a second phase of investment provides for the introduction of compression facilities offshore, which would be a first in the deposit of South Pars.
Since signing with the NIOC to the memorandum of agreement in November 2016, the Total incurred for the account of the consortium the engineering work and initiate the tender procedures for award of contracts necessary for the development of the project by the end of the year.
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