Azerbaijan, Baku, August8 /Trend/
Delays of CNPCI in development of Phase 11 in South Pars, alongside new policies of Iran's Oil Ministry on boosting capacities of domestic contractors, may lead to possible suspension of a $5 billion gas contract with the Chinese company, Mehr News Agency reported.
Two years after signing a $5 billion contract the China National Petroleum Corporation CNPCI, development of mega gas project in Phase11 of South Pars has yet to begin.
The company invested $18 million last year in the project after Iran's ultimatums. However, the basic operations in Phase 11 of joint gas field with Qatar have yet to begin.
Currently 9 percent of basic Phase 11 studies have been completed by CNPCI. However, the company has a 10 percent delay on basic review, with continued increases.
According to the contract, the Chinese company is obligated to develop Phase 11 in 25-months-time and to produce 100 million cubic meters of gas, daily. In the meantime, the new Oil Minister Roustam Ghasemi stated that domestic contractors will be supported to develop joint fields and other projects, thus the contract's cancelation is likely.
Iran warned CNPCI that if it does not fulfill its obligations on developing Phase 11 of the South Pars gas field, the contract would be cancelled.
The National Iranian Oil Company (NIOC) and CNPC signed a contract, worth 5 billion dollars, two years ago for producing 2 billion cubic meters of natural gas per day and 70 thousand barrels of gas condensate from phase 11 of the South Pars gas field, but the Chinese company has not yet begun developing the project operations.
CNPC officials have said that they are facing financial problems to provide the $5 billion investment required for the project.
If CNPC delays continue, Iran will start negotiations with domestic companies for replacing CNPC in the project, NIOC announced.
The South Pars gas field is located in the Persian Gulf on a border zone between Iran and Qatar. The field's reserves are estimated at 14 trillion cubic meters of gas and 18 billion barrels of liquefied natural gas.
Known as the world's largest gas field, South Pars holds an estimated 50.97 trillion cubic meters of gas and some 50 billion barrels of condensates.