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March 2003 / No. 22


Oil & Gas


Flame of Industry Blazing in South Pars

What is 150 hectares long weighs 130,000 tons and annually procures $1.32 billion for Iran? South Pars Phases 2 & 3, of course. This mammoth project –105 kilometers away from Port Assaluyeh’s shore– includes an onshore refinery, offshore facilities, 22 wells and two 32-inch-thick sub-sea pipelines extending 105 kilometers each. These two phases alone pump 54 million cubic meters of natural gas, 80,000 barrels of condensate natural gas (CNG) and 400 tons of sulfur per day. Their unmanned offshore facilities work independently through refineries, sending the refined gas via 56-inch-thick pipes to the Third Trans-Iranian Gas Trunk Line (IGAT – 3).

"The South Pars project has 11 more phases; six of which have already been contracted out to foreign and domestic firms at a total of $7.4 billion."

Iranian contractors account for 30% of the project’s construction, but also benefited from transfer of technology –particularly in offshore facilities– to an extent that they are now approaching self-sufficiency in this field. They can already construct, install and exploit offshore facilities unassisted, which have led to huge currency savings. The onshore refinery has claimed 26 million hours of manpower, with a maximum of 11,000 people working on it at a time –9,400 of which were Iranian.

The South Pars gas field, which is the world’s largest stand-alone gas field, is situated a hundred kilometers below Iran’s southern shore on a border it shares with Qatar. This gas field has a total area of 9,700 square kilometers, 3,700 of which belongs to Iran. Iran’s share of the field is estimated at 13.1 trillion cubic meters of gas, which is 50% of the country’s proven reserves and 8% of the world’s. Furthermore, the field is said to contain 17 billion barrels of CNG.

Phases 2 & 3 of the South Pars project were completed by means of a buyback contract worth $2.012 billion. Analysts of the world’s oil industry have since recognized the project as a success. In addition to phases 2 & 3, the South Pars project has 11 more phases; six of which have already been contracted out to foreign and domestic firms at a total of $7.4 billion. Phase 1 has had a physical completion of 94% and Phases 4 & 5 have had a physical completion of 20%. When Phase 1 is completed it is expected to have a daily yield of 25 million cubic meters of refined natural gas, 40,000 barrels of CNG and 200 tons of sulfur. Phases 4 & 5 will produce 50 million cubic meters of natural gas for domestic consumption and export, 80,000 barrels of CNG and 400 tons of sulfur per day in addition to its annual yield of a million tons of LPG, LNG and ethane which will be used to fuel petrochemical complexes. Phases 4 & 5 will be ready for production by 2005.

South Pars’ main aim is meeting the increasing demand for gas in the world and domestic market. Its gas is also used to re-inject oil fields to reinvigorate oil supplies. Iranian President Seyyed Mohammad Khatami took part in a ceremony on 15 February 2003 to mark the beginning of production of phases 2 & 3 of South Pars. During the ceremony President Khatami said oil and gas are valuable commodities and it would be unwise if they were not turned into renewable material wealth. Oil and gas can be of the most significant advantages our country enjoys if we do not treat them as single-use objects. He continued to explain that if oil and gas were treated as consumer goods we would be left with nothing to fill their place. Even though oil has become the country’s economic engine we must also supplement our budget by production and endeavor. President Khatami stated that the government was proud of the development of South Pars and congratulated the Minister of Oil, Bijan Zangeneh and other contributors for the completion of Phases 2 & 3 and the progress of Phases 1, 4 & 5 after he visited their sites and conducted an inspection.

 

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