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Petroleum industry

Iran's South Pars Gas Development Reaches New Milestone with $2bn Tender for Phases 9-12

Strategic Insights

— 2 min read

Iran's efforts to boost its gas production have gained significant momentum with the issuance of tender documents for the $2bn development of phases 9-12 of the South Pars gas field. The tender, handled by Pars Oil and Gas, a subsidiary of the National Iranian Oil Company (NIOC), marks a crucial step in the development of the giant 12.3 trillion cubic meter offshore gas field. The project, consisting of two groups, aims to enhance the output of natural gas, liquefied petroleum gas (LPG), condensates, and sulfur, with the gas being allocated for the domestic network, while LPG and condensates are earmarked for export. A significant portion of the ethane production will be used to feed a domestic petrochemical complex.

Key Takeaways:

  • The $2bn development project for phases 9-12 of the South Pars gas field is a significant milestone in Iran's gas production efforts.
  • The project aims to increase the output of natural gas, LPG, condensates, and sulfur, with gas allocated for the domestic network and LPG and condensates for export.
  • A fraction of ethane production will be used to feed a domestic petrochemical complex.
  • Prequalification bids for the project must be submitted by September 10, with the winner to be announced by the end of March 2001.
  • The project will include the delivery of 55 million cubic meters per day of gas to a nearby 7 million-ton-per-year liquefied natural gas (LNG) and liquefaction complex, and the production of 80,000 barrels per day of condensates for export.
  • Pars Oil and Gas is open to proposals that include the construction of the LNG complex, with those offering the upstream and downstream aspects combined touted to receive additional points in the selection process.
  • Industry sources predict BG, a UK-based company, will form a joint venture with Oil Industries' Engineering & Construction (OIEC) by the end of October, with BG guaranteeing the sale of LNG products to India, where it holds a strong commercial position.

Statistics:

  • The South Pars gas field has a total capacity of 12.3 trillion cubic meters.
  • The development project for phases 9-12 will focus on boosting output of natural gas, LPG, condensates, and sulfur.
  • 1 million tons of ethane per year will be used to feed a domestic petrochemical complex.
  • 55 million cubic meters per day of gas will be delivered to a 7 million-ton-per-year LNG complex.
  • 80,000 barrels per day of condensates will be produced for export.
  • The tender documents for phases 11-12 do not include the construction of an LNG complex, but Pars Oil and Gas will welcome proposals that include the complex in their scope of work.

Sources:

  • Pars Oil and Gas
  • National Iranian Oil Company (NIOC)
  • BG (UK-based company)
  • Oil Industries' Engineering & Construction (OIEC)
  • WPA (World Petroleum Alliance), August 7, 2000, p12 (mentioned in the text as a previous cooperation between BG and OIEC)

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