Iran is moving forward with plans to ramp up production at its South Pars gas field, which is part of the world’s largest gas reservoir. With an estimated 14.2 trillion cubic meters (Tcm) of gas reserves and 18 billion barrels of gas condensate, South Pars spans 3,700 square kilometers. Its counterpart, Qatar’s North Dome field, holds around 36.8 Tcm of gas and 32 billion barrels of gas condensate over 6,000 square kilometers.
The South Pars field is being developed in 24 phases, each with varying production targets, ranging from 28 million cubic meters per day (mcm/d) to 57 mcm/d. Phase 11, in particular, has become a symbol of Iran’s efforts to navigate the impact of international sanctions since the 1979 Revolution. Touraj Dehghani, CEO of Iran’s Pars Oil and Gas Company, confirmed that production from Phase 11 is increasing, with the output expected to reach 28 mcm/d in the coming weeks. Further production boosts are anticipated across other phases of the field, according to an exclusive source in Iran’s energy sector.
Factors Driving Iran’s Optimism
Two key developments are fueling optimism in Iran about the future of South Pars. First, Qatar’s more cooperative approach to gas extraction in the region has helped improve the outlook. In early 2017, before Qatar lifted a 12-year moratorium on production from the North Dome, both countries discussed ways to jointly develop the reservoir to prevent damage to both South Pars and North Dome fields. However, Iran has been criticized for its production practices, which some claim have compromised the longevity of the gas fields.
The situation worsened after the United States withdrew from the Joint Comprehensive Plan of Action (JCPOA) in 2018, re-imposing sanctions. Iranian local firms, lacking the technology and expertise previously provided by foreign companies, were under pressure to increase production. This led to rushed drilling practices, which have reportedly affected the structural integrity of some wells, reducing long-term output.
In response to these concerns, senior oil and gas officials from both Iran and Qatar met last month to reinstate better production practices. These discussions came amid reports from Iran’s National Development Fund, which warned that production could fall by up to 30% in the next decade due to decreasing pressure in the fields.
New Plans for South Pars and LNG Development
The second factor driving Iran’s renewed confidence is a $20 billion program finalized in March to build 28 large platforms aimed at boosting gas pressure at South Pars. Local firms will lead the project, with technical support expected from Qatar. This collaboration also includes assistance from Chinese and Russian firms, who remain involved in South Pars despite tensions and sanctions.
Originally, China’s CNPC had a significant stake in Phase 11, but it was forced to withdraw after the U.S. re-imposed sanctions in 2018. Despite this, China has continued its involvement in Iran’s oil and gas sector through contract-based projects, such as field maintenance and technology provision. Following CNPC’s exit, Iran continued work on Phase 11, with its target production capacity remaining 57 mcm/d.
In parallel, Iran’s Petroleum Ministry is planning the construction of a medium-sized liquefied natural gas (LNG) plant in Asaluyeh, scheduled to begin production by 2026. The plant will use gas from both South Pars and the North Pars field, which has an estimated recoverable volume of 47 trillion cubic feet. Iran sees LNG as a crucial part of its future energy strategy, especially in light of the global shift in energy markets following Russia’s invasion of Ukraine in 2022.
Challenges and Future Prospects
Despite these ambitious plans, Iran’s LNG development has faced numerous setbacks over the years. Earlier projects, such as the Iran LNG Project, encountered delays and difficulties, particularly due to escalating sanctions. In recent years, Russia’s Gazprom has stepped in to help with the construction of LNG facilities, with a focus on smaller, less vulnerable plants.
The cooperation between Iran, China, Russia, and Qatar at South Pars could serve as a model for expanding gas production across other phases of the field. As Phase 11 reaches its targeted production levels, Iran is hopeful that this partnership will lead to greater stability and a more robust LNG export sector, despite the ongoing challenges posed by sanctions and geopolitical tensions.
Conclusion
Iran is steadily working to increase gas production at South Pars, with an eye on both regional cooperation and international partnerships. While challenges persist, the country’s recent efforts, along with support from its allies, suggest that Iran may be able to achieve its production goals and strengthen its position in the global LNG market.
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