Iran Puts Chinese Firm Aside from Project to Develop Phase 11 of South Pars

Iran has ended cooperation with the Chinese CNPC company after lagging in completion of the development of the phase 11 of South Pars oil and gas field, Oil Minister Bijan Namdar Zanganeh announced on Sunday.

"The (Iranian) Petro Pars company will implement 100% of the contract in the first stage and the Chinese company has been put aside from the contract," Zanganeh told reporters in Alborz province near Tehran on Sunday.

He added that the first jacket of the phase 11 of the South Pars field will be installed by the end of this (Iranian) year (started on March 21) to produce 500mln cubic feet of gas.

Zanganeh noted that negotiations are underway with the Iranian companies, including MAPNA, to implement the second part of the contract which is focused on increasing the pressure in the gas reservoirs of the phase 11.

The phase 11 of the South Pars contract was signed between National Iranian Oil Company (NIOC) and a consortium of France’s Total, China’s CNPC International and Petropars Company in Tehran on July 3, 2017.

Based on the $4.879 billion deal, Total was operator of the SP11 project with a 50.1% interest, in partnership with Chinese state-owned oil and gas company CNPC (30%), and NIOC subsidiary Petropars (19.9%).

SP11 is to be developed in two phases. The first phase, set to cost around $2 billion, comprises 30 wells and two wellhead platforms connected to existing onshore treatment facilities by two subsea pipelines.

Depending on reservoir conditions as production progresses, offshore compression facilities could be added, a first on the South Pars field.

Following US’s imposition of sanctions on Tehran following a decision by Washington to pull out of the Iran nuclear deal, Total announced it would no longer stay in the SP. 11 contracts and its stocks were automatically transferred to the Chinese side of the deal as it is stipulated in the contract.

But Zangeneh said in February that since Total’s pullout, the Chinese company had not done anything specific regarding the contract.