Iran Unveils $17 Billion Contracts to Intensify Development in South Pars Gas Field

In a significant step towards enhancing Iran’s energy capabilities, President Msoud Pezeshkian, alongside senior officials from the Oil Ministry, recently participated in a ceremony to award major contracts to four prominent Iranian energy companies: Petropars, Khatam Headquarters, OIEC, and MAPNA. These companies will focus on critical projects in seven zones within the South Pars gas field, aiming to improve the pressure of this expansive gas reservoir.

According to a report by the Oil Ministry’s news service, Shana, the initiative involves the installation of an impressive 42 giant rigs, which collectively weigh approximately 420,000 metric tons. This undertaking is set to include:

• 14 pressure-boosting platforms, each accommodating 120 workers and technicians.
• A significant increase in reservoir pressure, estimated at 1 billion cubic feet (28.3 million cubic meters) per day.
• About 600 kilometers of underwater pipe-laying operations.

One of the most noteworthy aspects of this project is that around 70% of the necessary installations and equipment will be sourced from domestic suppliers. This includes contributions from shipyards located along the Persian Gulf coast, which is expected to bolster the local economy.

Furthermore, the project is set to create approximately 17,000 direct jobs, with an additional 50,000 jobs anticipated within the broader supply chain. This job creation is crucial for the Iranian workforce, particularly in the energy sector.

As the project progresses, it is projected to enhance the gas recovery rate in South Pars from 54% to 75%, potentially generating around $780 billion in new revenues from the production of natural gas and condensates. This financial boost is vital for Iran’s economy, especially given its reliance on energy exports.

South Pars, one of the world’s largest gas fields, is responsible for providing approximately 70% of Iran’s natural gas supply and 40% of the feedstock used in the country’s gasoline production sector. The field comprises:

• 40 offshore drilling rigs
• Hundreds of wells
• Thousands of kilometers of underwater pipelines across 28 phases

In the previous month, gas production from South Pars reached a remarkable record of 716 million cubic meters per day. However, industry experts have raised concerns about a possible significant decline in production levels in the coming years due to decreasing pressure within the field.

In response to these challenges, Oil Ministry authorities have emphasized that the pressure-boosting initiatives in South Pars are expected to extend the field’s operational lifespan by an additional 20 years. They foresee that the first of these pressure-boosting projects will begin operations by 2030.

Importantly, the onshore section of the project has already commenced, backed by an initial investment ranging from $300 million to $400 million. This strategic move is anticipated to pave the way for enhanced gas production and economic stability in the region.

In summary, the ongoing developments in South Pars signify a transformative phase for Iran’s energy sector. With the combination of domestic sourcing, significant job creation, and substantial revenue potential, these projects are poised to not only improve production but also contribute to the overall economic landscape of the nation.