South Pars Gas Fields

$۲ Billion Phases

The value of produced gas in preferred phases equals ۲ billion dollars in a year. Since Bijan Namdar Zanganeh visited South Pars Gas Field as the Oil minister, the speculations have been fueled that the new minister has high potential for developing different phases of south Pars.

Translated by: Nazanin Ehsani Tabatabaee

The value of produced gas in preferred phases equals 2 billion dollars in a year.
Since Bijan Namdar Zanganeh visited South Pars Gas Field as the Oil minister, the speculations have been fueled that the new minister has high potential for developing different phases of south Pars. Besides, the government tried to narrate the story of taken phase, so that the government's log will be clarified when the project is operated. But, many different actions were taken to root out delays in operations. At the same time, oil minister used to reject the comments on financial problems of south pars and he believed that the main problem was due to weaknesses in management. Yet, during the ministry of Rostam Ghasemi, all problems were linked to sanctions. So, the first action of Zanganeh as oil minister, was to cancel the project of 35-month phases; the project for operating the finalized phases. Practically, no change has been made in those phases. Oil minister of Rouhani government decided to discontinue the time taking plans which needed more money to finalize. He also terminated some development contracts made by former government so that he can start the main part of activities by prioritizing phases in south Pars. Simultaneously, Zanganeh choose the phases of 12, 15, 16, 17 and 18 as prior ones to be finalized. These phases were among the ones which had made a progress of 80 percent or more.

Produced phase
Among all prior phases, phase 12 is the first which has been progressed more than others. The project of this phase started in 1384(2005) and it reached to production stage in the first working year of Rohani Government. In that time, the progress percentage of this phase was announced about 91. Less than one year later and in Khordad 93(June 2014), this progress reached 95 percent. Not only could Rohani government implement 4 percent of physical development in this phase, but also it started production after long times of promises.
The aim of developing phase 12 is producing 3 billion Cubic feet of rich gas to be delivered to country network, i.e. 1 billion of which is sent to country network and other 2 billion feet is used for other purposes like converting to LNG, producing sweet gas, preparing 110,000 barrels of natural-gas condensate and 750 tons of sulfur per day. Regarding this, managing director of Petropars also talked about 12 billion cubic meter production in phase 12. Moreover, he promised that the level of production of this phase would increase to 25 billion cubic meters daily in Khordad (June). Cost estimation of this phase is about 7.746 billion dollars of which 6.178 billion dollars have been provided. Nevertheless, developing this phase is not limited to productions, because two platforms of this phase were ready to operate in Khordad (June) in order to raise the productions in near future.

15 and 16
Phases 15 and 16 are also among the prioritized plans. These phases have progressed by 1 percent under Rohani government. Phases 15 and 16 have been developed up to 93 percent showing 1 percent more comparing to last year. Besides, gas productions have been started in these phases since last Azar (December). According to Mehrnews, the first action for gas sweetening in phases 15 and 16 were taken in south Pars under Ahmadinejad's government. However, in that time those phases were operated together with phases 6 and 8 in south Pars to compensate for severe shortage of gas in winter. Finally, in last Azar (December), gas production started in one of the gas sweetening lines of refineries in the mega project of South Pars. Two refineries of these phases were also operated, despite the comments against them. According to main purpose of these two phases, 50 million cubic meter of refined natural gas have to be injected to country network. There are also some other plans in these phases like exporting 75,000 barrels of natural-gas condensate daily, producing 1 million ton Ethane per year for petrochemical purposes, 1.5 million tons LPG per year and 400 tons sulfur per day to be exported. According to Akbar Shabanpour, managing director of Pars oil & Gas Company, there are 4 refineries in phases 15 and 16 and each one has the potential of refinery, production and injection of gas for 10 million cubic meters per day.
Heretofore, some critic media in Iran like Tasnim published this news that the progress in above mentioned phases is very slow. Tasnim news argued that physical progress of phases 15 and 16 in South Pars is near 92 percent according to reports from Oil Ministry of Ahmadinajed's government. Such statistics were never denied by the managers of oil ministry. For this reason, there were debates about the slow progress of these phases in south Pars under Rohani Government.

17 and 18
Phases 17 and 18 are the other ones of priority for Zanganeh. These phases made progress up to 78 percent last summer and which reached 82 percent this Khordad (June). Chairman of Islamic Consultative Assembly has recently visited South pars where the managing director of Pars oil & Gas Company stated that first refinery of phases 17 and 18 would start working this year. Ali Akbar Shabanpour also said that by operating one of the refineries in these phases, 14 million cubic meters of gas would enter the country network each day. Developments in south Pars aim at producing 50 million cubic meters of refined natural gas to be used in country network, 75,000 barrels of Natural-gas condensate per day for export, 1 million tons of ethane per year for petrochemical uses, 1.5 million tons of liquid gas per year and 400 tons of sulfur for export per day. These all have been developed up to 83 percent during last year. Mehrnews also reported on first day of Tir (July) that excavation of marine shafts has been implemented simultaneously with developing phases 17 and 18 in Persian Gulf. Statements of the managing director of Pars Oil and Gas Company show the physical progress of these phases hit 83 percent.
In report to Islamic Consultative Assembly, Ali Akbar Shabanpour mentioned: "A refinery of phases 17 and 18 is going to start working this year and after that 14 million cubic meters of gas is added to country network.

Waiting for investments
Reviewing the value of operating phases, one must notice their financial value when finalizing. In finalized phases of 12, 15, 16, 17 and 18 in south Part, 25 million cubic meters of Gas are extracted daily and the value of produced gas in each one of these phases is around 2 billion dollars per year. Furthermore, 500,000 tons of liquid gas is extracted from each finalized phase which value 250 billion dollars in a year. Considering all 5 phases, total number shows 250 billion dollars for producing liquid gas per year and in case of operations, this sum is added to Treasury. Shabanpour, managing director of Pars oil & Gas Company has already approved 2 billion dollars for development of south pars oil and gas field. In this case, operation of all these five phases would yield a substantial return on invested capital. However, many experts believe that in addition to local aims, committed and professional partners should be selected to develop different phases in south pars first. In this way, beside operating such phases, more return on invested capital is realized and a competitive space is also created.