Investment in South Pars Projects Surges to $1.2 Billion

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Estimated to hold eight percent of the world’s total gas reserves and almost 50% of Iran’s domestic gas reserves, South Pars is considered to be the world’s biggest gas field by reserves.

The South Pars gas field commenced production in 2002 and continues to be developed in multiple phases by the Pars Oil and Gas Company, a subsidiary of the National Iranian Oil Company (NIOC).

The giant offshore gas field comprises 28 production blocks, which are being developed in 24 phases with a target to produce a total of 790 million cubic meters of gas a day.

Investment in the development projects of Pars Special Economic Energy Zone in Asalouyeh, southern Bushehr Province, experienced a 40% rise in 2021 compared to a year ago, deputy director of Planning and Development Department at PSEEZ said.

“The figure amounted to $850 million in 2020, yet it increased by 40% or $340 million to stand at $1.2 billion in 2021,” Khosro Afrouzeh was also quoted as saying by the Oil Ministry’s news service.

The region is projected to attract $4.5 billion in investment over the next three years, most of which will be spent on building new petrochemical and chemical plants and refining complexes, he added.

Afrouzeh said the upstream sector of South Pars Gas Field in PSEEZ has attracted close to $80 billion investment over the last two decades that has primarily been used to develop gas processing units.

More than 30 offshore and onshore gas refining facilities have been built in PSEEZ in the past two decades, which supply feedstock to 40 petrochemical plants in Asalouyeh.

The official emphasized the use of latest technologies to ensure maximum production in the upstream sector and maximum value added in the downstream sector. 

He also stated that special attention should be paid to the development of South Pars region, as any problem in the field’s development and production process will impact the country’s revenue generation by about $5 million per day.

“To address the decline in production from South Pars, we have a compensatory scheme, the neglect of which will make us an importer of gas by 2025.”

South Pars is the source of 70% of the country’s gas production and by drilling new wells and conducting oil engineering operations such as acid work will prevent the natural decline in production. 

“But the most important thing we have to do is to build gas booster stations, which is a fundamental step and needs $20 billion in offshore and $10 billion in onshore operations,” he said.

South Pars, the world’s largest proven offshore natural gas reservoir, contains at least 12 trillion cubic meters of gas, of which close to 9 tcm are extractable and Iran has extracted about 2 tcm of gas from the field in the past 18 years.

The huge gas field, which Iran shares with Qatar, covers an area of 9,700 square kilometers, 3,700 square kilometers of which (South Pars) are in Iran’s territorial waters and the rest (North Dome) is in Qatari waters. It is estimated to contain large deposits of natural gas, accounting for 8% of the world’s known reserves and approximately 18 billion barrels of condensates.

South Pars has been designed in 24 phases and includes 39 offshore platforms, 373 wells and 3,000 kilometers of subsea pipelines.

The official underlined that there are several other fields to be developed, including 10 gas fields in central Iran as well as Kish, North Pars and Farzad A and B gas fields.

According to Hassan Abbaszadeh, the National Petrochemical Company’s director for planning and development, the company plans to raise its production capacity to 133 million tons per year by 2025 and to do so; it has devised 48 projects that need an investment of $30 billion in PSEEZ.

“Of the total amount, $8 billion have been spent on 17 projects so far and the rest will be allocated in the next four years,” he added. 

Almost 60% of the petrochemical projects are in Asalouyeh and Mahshahr in southern and southwestern Iran, and the rest are scattered in other regions. 

Among the industries affiliated to the oil industry, the petrochemical sector is the most important one because it produces the most added value in the value chain, he added.

The official noted that currently, 67 petrochemical complexes are operating across Iran with a total production capacity of 90 million tons per annum, adding that the figure is expected to reach 100 million tons in a year.

Abbaszadeh said the petrochemical sector produces 330 grades of petrochemical products as well as 40 types of chemicals.

Source: Financial Tribune

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