Latest edition of Petroleum Ministry’s Mashal Magazine quoted Meshkinfam as saying that the project will be in force if gaining the expected results.
Mashal writes that Meshkinfam gave the interview on the occasion of December 21 marking the anniversary of establishment of the POGC, which was initially named as the Oil Development and Engineering Company but later changed its name into POGC as it focused its activities on production of gas.
It wrote that the POGC is now in charge of production and development in South Pars, North Pars, Golshan, Ferdowsi, Farzad A and Farzad B fields.
Regarding importance of production from South Pars gas field, which is shared with Qatar, development of the gas field under the Rouhani Administration was put on agenda of the Ministry of Petroleum based on the prioritization of the projects and targeted development of the remaining phases of South Pars.
South Pars gas field, covering an area of 9,700 kms, is the world’s biggest gas field. Some 3,700 kms of the field lies in Iran. The gas field enjoys 14,2 trillion cubic meters of gas reserves, which constitute eight percent of the world’s gas reserves. Additionally, it contains 18 billion barrels of gas condensates.
Providing an account of the project for South Pars gas field development, Meshkinfam told Mashal that total amount of gas production in South Pars from the date of exploitation until end of the Iranian calendar year of 1394 (March 19, 2016), stood at about 879 billion cubic meters, earning the country equal to 378 billion dollars in revenue.
He said South Pars gas production in the Iranian year 1392 (2013-14) was about 285 million cubic meters and following operation of parts of phase 21, the amount of gas extraction from the gas field will soon reach 515 cubic meters a day.
Meshkinfam said that this year (March 20, 2016-March 20, 2017) South Pars gas production level will hit its record high. “Total enhanced recovery from South Pars will reach 140 million cubic meters by end of this year (March 20, 2017); of course, up to so far, 95 million cubic meters of the target has been met.”
The official said 66 percent of the national gas consumption is supplied by South Pars. “This year, with daily production of 140 million cubic meters of gas in South Pars, new record in production of the gas reservoir was observed.”
He said now, Iran is daily extracting 500 million cubic meters gas from South Pars and once the capacity building project is complete, the amount will reach 550 million cubic meters a day by end of this year (March 20, 2017).
He called the current Iranian calendar year of 1395 (March 20, 2016-March 20, 2017) as a “good” year for the POGC in terms of gas extraction from the joint gas field and said once all phases of South Pars are complete, 200 million cubic meters more will be added to the field’s gas extraction capacity. With full development of South Pars field, Iran can extract one million barrels/day gas condensates, nine million tons/year ethane, 10 million tons/day LPG and 5,000 tons/day sulfur.
Meshkinfam said 91 billion dollars needs to be invested for development of all phases of South Pars: 31 billion dollar investment in development of the phases put into operation and 61 billion dollar more in the phases under implementation.
The POGC Chief said 21 billion dollars out of the said sum should be invested in South Pars for another two years.
He said South Pars will earn the country a revenue four times the volume of investment made in it.
In the year 1394 (2015-16), about 131 billion cubic meters gas were extracted and the value of gas produced and of the related products has been 46 billion dollars.
Meshkinfam said the budget set aside for South Pars in 1395 was about six billion dollars and in the first three quarters (March 20-December 20) of this year, about four billion dollars of the sum were streamlined.
Taking gas sold for 25 cents and gas condensates for 50 dollars, once South Pars gas field’s all phases are complete, 272 million dollars a day or 90 billion dollars a year in revenue will be earned for the country, said Meshkinfam.
He provided details of the project for development of various phases of South Pars and said with completion of a number of the half-finished phases, South Pars gas field’s production will reach 540 million cubic meters to 550 cubic meters by end of this year (to end on March 20, 2017).
For the time being, 600,000 barrels/day gas condensates are produced in South Pars and it will reach 680,000 barrels per day by end of this year (to end on March 20, 2017), said Meshkinfam.
The POGC Chief said as the half-finished phases of South Pars gas field are prioritized, the possibility was provided for concentration of the financial sources and activity in the phases where more progress has been observed and consequently, their development was accelerated.
“In absence of prioritization of the phases, we would not have been successful to exploit a new phase,” he boasted.
Meshkinfam said by end of the next Iranian calendar year of 1396 (2017-18), development of all phases of South Pars, except phase 11, will be complete. “Up to now, 10 refineries have been put into operation in South Pars and three more refineries will also be built.”
He said out of 415 specified wells, 258 wells and out of 40 platforms, 25 platforms have been put into operation in South Pars. Additionally, 2,400 kms of offshore pipelines have been laid.”
As for pressure drop of South Pars gas field reserves, the POGC Chief said, “Now a French company serves as an international consultant and is busy mulling pressure drop in South Pars wells and based on the outcome of the study, we will embark on designing and building pressure drop platforms.”
He said in case of obtaining the target results, a new generation of gas platforms will be installed to prevent drop of natural pressure in South Pars reserves.
The contract, to be signed with French Total Company for development of phase 11 of South Pars, envisions construction of platforms to check pressure drop, said Meshkinfam, adding that under the contract, Total will transfer the technology for construction of pressure drop prevention platforms.
He said the model, Total uses to prevent pressure drop in phase 11, is to be coined and used in development of other phases.
The official pointed to the visit of Total envoys to the platform construction companies in Iran and said to make domestic companies prepared to construct pressure drop prevention platforms, whose technology has thus far been absent in Iran and they are about 20,000 tons in weight, necessary infrastructures need to be prepared in Iranian companies for the purpose.
As for extension of award to Total for contribution into development of phase 11, Meshkinfam said the amount of award will depend on the extent of fulfillment of liabilities and increase and maintenance of production level. “So, in case of fall in the production, the award of the company will proportionately lower.”
He added that Total award for activity in the field is forecast for a period of 20 years and in tandem with increase and/or decrease in the production.
Meshkinfam said gas pressure drop in phase 11 of South Pars was tangible since the beginning and on this basis, the contract for development of the phase envisions construction of the gas pressure buildup platform. “Construction of the platform is to serve as a model of other phases of South Pars. However, as Total is busy studying the subject, the POGC follows up the issue independently in cooperation with French international consultant group.”
“For construction of pressure build up platforms we will use domestic potential as much as possible, while expecting domestic contractors to raise their potential in the sector,” he added.
“We expect the gas pressure build up platforms to be installed in South Pars phase 11 for the next four years,” he noted.
Meshkinfam referred to Iran’s lack of experience in construction of the pressure build up platforms and said the technology for construction of the pressure build up platforms should be transferred to Iran definitely and on this basis, Total has paid an inspection visit to Iranian yards in Bushehr, Bandar Abbass and Khorramshahr to take firsthand account of construction of the platforms.
The Manager also referred to an agreement, reached in principle between his company and the consortium, comprising French Total, CNPC and Petropars Company on November 8, 2016, for development of phase 11 of South Pars and said for the time being, 80 percent of work on the draft contract is over and appendix of the contract are getting prepared.
He emphasized that the draft protocol for phase 11 of South Pars will be prepared based on nation interests and said, “For the first ever, the draft protocol is getting prepared in Iran and delivered to the contractor and they can inform us of their viewpoints as well.”
Meshkinfam noted that earlier and in the buy-back contracts, the contractors provided the draft protocol and delivered it to the employer but this time and under the new model of oil contracts, the employer prepares the draft and delivers it to the contractor.
He commented on Qatar’s capacity of gas extraction in South Pars and said based on the information available, the Qataris are availed with the capacity to extract 21 million cubic feet of gas from the joint field.
Referring to Qatar’s limitations in gas extraction from the field, Meshkinfam said Qatar’s export of gas, obtained from the South Pars field, is limited to LNG, while Iran puts the extracted gas at domestic consumption.
He said Qatar’s gas extraction of South Pars field depends on the LNG market, while it enjoys the capacity for extraction of 600 million cubic meters/day gas on the average and Iran will as of next year, bring its production of gas out of the South Pars gas field to the level of 600 million cubic meters.
The official pointed to extra payment to the contractor companies in South Pars and said regarding positive international conditions available for the purpose, “we will try to secure necessary advanced equipment for development of phases of South Pars as soon as possible.”
He added, “We have paid extra cash to certain companies like SADRA to purchase necessary equipment.”