Baku, Azerbaijan, Jan. 19
By Dalga Khatinoglu – Trend:
Ten years after resuming the development of Iran’s second biggest offshore gas field, Kish, with 1.4 trillion cubic meters of in-situ gas reserves and 70 percent recovery rate, the country hasn’t been able to progress noticeably.
Last month Iran signed a memorandum of understanding with Shell on studying the reservoir, which contains 514 million barrels of gas condensate as well.
An unnamed source told Fars news agency January 18 that Iran is likely to hire Shell to develop Kish gas field, a giant field in the Persian Gulf, but spokesman of Shell told Trend that he can’t comment on this issue.
According to an official document, prepared by Iran’s Oil Ministry and seen by Trend, the first phase of project is aimed to produce 28.3 million cubic meters per day (mcm/d) of gas as well as 11,300 barrels per day (b/d) of gas condensate. The field, divided to three phases, would produce 85 mcm/d of gas after becoming full operational.
Iran started developing Kish gas field 48 years ago, but after drilling the first well at 2,621 meters, the operations were halted until 2004. The drilling of the second well at 4,409 meters was also a failure, and Iran stopped working on the field after that.
In 2008 Iran signed a buy-back contract with Kayson oil, gas and energy company (KOGC) to develop the project, but the contract was cancelled two year later. Iran then signed a financial services agreement with domestic companies, but this contract was also cancelled due to financial problems.
Since 2017, Iran has resumed the development of the project several times. During nine months of the current fiscal year (started on March 21), Iran only spent $76 million to develop the drilling operations at the field.
However, the first phase of project with worth $2.5 billion (including construction of a refinery with 28 mcm/d of gas and a power plant with 75 MW capacity) has been less than ten percent developed as of January 1, 2017, the ministry’s report says.
Now, Iran plans to sign a contract with a foreign company with financial and technical might to develop the first phase of Kish gas field in 18 months.
The project includes drilling 13 wells, which progressed by 76.83 percent as of the end of 2016. About 33 percent of the drilling operations were completed in nine months of Iran’s current fiscal year.
Iran produced about 244 bcm of commercial gas during 2016, or 16 percent more than 2015. The country plans to increase this volume to 456 bcm by 2021.
Iran’s gas reserves stand at about 34 trillion cubic meters, ranked first in the world.
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Dalga Khatinoglu is the head of Trend Agency’s Iran news service, follow him on Twitter: @dalgakhatinoglu