South Pars (Phase 2-3)

Location

The South Pars field is located in the Persian Gulf, off the coast of Iran. It extends into Qatari territory, where it is known as the North Field. Phases 2 and 3 are situated in Iranian waters, approximately 70 meters deep.

Discovery and Development

The South Pars field was discovered in 1990 by the National Iranian Oil Company (NIOC). Phases 2 and 3 were developed by a consortium consisting of TotalFinaElf (now TotalEnergies) with a 40% interest, Russia's OAO Gazprom with 30%, and Malaysia's Petronas with 30%.

Production

• Gas Production: Phases 2 and 3 began production in March 2003, with an expected plateau production rate of 2 billion cubic feet per day (bcfd) of gas.
• Condensate Production: The phases produce approximately 80,000 barrels per day (b/d) of condensate.
• Other Products: In addition to gas and condensate, the phases also produce liquefied petroleum gas (LPG) and sulfur. Specifically, they produce 3,000 tons of LPG and 400 tons of sulfur per day.

Infrastructure

• Offshore Platforms: The production is supported by two unmanned wellhead platforms, each with limited topsides weighing 1,700 tons. These platforms were built by the National Petroleum Construction Company (NPCC) in Abu Dhabi.
• Pipelines: Gas and condensate are transported via two 32-inch, 105 km pipelines to the Assaluyeh gas processing facility onshore.
• Onshore Facilities: The Assaluyeh plant covers a 150-hectare area and includes four gas processing trains, export compressors, condensate stabilization and storage units, and sulfur recovery units.

Production Routing

• The water/gas/condensate mix is piped directly to Assaluyeh, where condensate is stripped. The gas is treated to remove hydrogen sulfide and mercaptans before being transmitted through a trunkline to the mainland gas network at Kangan.

Costs and Funding

• The development costs for Phases 2 and 3 totaled approximately $2 billion, funded entirely by the three partner companies.

Operational Handover

• Once the production phase started, the operation was set to pass to NIOC. The three partners were to be compensated over a seven-year period in the form of liquid condensates produced from the field.

Economic and Contractual Terms

• The project operates under a buy-back contract, where the partners are compensated through the sale of condensate produced from the field. The contract includes terms for cost recovery, remuneration fees, income tax, royalty, and bonuses.

Production Profile

• The production from Phases 2 and 3 is part of a larger plan to develop the South Pars field in multiple phases. Each phase is designed to produce around 1 billion cubic feet (28 million cubic meters) of natural gas per day, although some phases have different production targets.

Significance

• The South Pars field is crucial for Iran's energy needs, fueling power stations, domestic markets, and supporting production from mature oilfields through gas injection. It also has potential for export projects, such as the proposed gasline to Pakistan and other markets in Asia and Europe.

In summary, South Pars Phases 2 and 3 represent a significant portion of Iran's efforts to harness its vast natural gas reserves, with substantial investment and international collaboration involved in their development.