Iran oil minister issues orders to facilitate South Pars gas field’s development plan

Iran Materials 25 September 2013 13:11 (UTC +04:00)

Azerbaijan, Baku, Sep.25/ Trend R.Zamanov

Iranian Oil Minister Bijan Namdar Zanganeh has issued three orders with regard to developing South Pars gas field.

Zanganeh has ordered the contractors to place a priority on developing phases 12, 15, 16, 17, and 18 of the South Pars gas field, the Mehr News Agency reported.

After completing the aforementioned phases, the so-called 35-month phases would be the ministry's top priority.

In his second order, the minister urged the contractors to facilitate completing offshore structures of the project.

"If the offshore wells, pipelines and drilling rigs come on stream before winter, the ministry will be able to refine the gas in the South Pars gas field's old refineries as well as the Bidboland and Fajr-e-Jam refineries," Zanganeh stressed.

The third and final order of the oil minister indicates that funds and equipment at Iran's non-joint fields should be transferred to the joint South Pars gas field so that the project comes on stream as soon as possible.

The Mehr News Agency reported on July 12 that the development projects of Iran's South Pars gas field's different phases have either stopped or are very slow due to financial problems. Currently the progress rate of the most active phase of the field is around one to 1.5 per cent per month.

During the past three years some 46 billion dollars has been invested in South Pars.

According to the National Iranian Oil Company's officials, another 16 to 17 billion dollars should still be invested in the field's development projects in the current year which started March 21. In order to reach the goal, each month one to 1.5 billion dollars should be invested in the project. However, as the Mehr News Agency reports, the field's contractors have failed to absorb such amounts of money.

Many experts have criticised the oil ministry for not giving priority to development projects of the country's joint oil and gas fields.

While Iran has yet failed to provide the necessary financial sources for carrying out development projects of the country's main joint oil and gas fields, the country's oil ministry has signed some multibillion-dollar contracts for development of national oil and gas fields such as Lavan, Mansouri, Tousan, Alfa, Zagheh, Soumar, and Kish. Iran has not issued bonds in the past six months, either.

Gholam-Hossein Khje-Ali, the former managing director of Sepanir Oil & Gas Energy Company which is the biggest contactor of South Pars, told Mehr News Agency that financial problems are the main reason behind the gas field's slow progress.

The development project of South Pars gas field's phases 15 to 18 will enter its sixth year in just 10 days. The phases have the capacity to produce 100 million cubic meters of gas per day, but even after six years they still are not ready to come on stream.

Phase 12 is now 92 per cent complete and it is predicted that with nearly two years of delay, some of the phase's offshore wells will start gas production in February 2014.

Other phases of South Pars are also experiencing very slow development and are not expected to come on stream any time soon.