France’s Total signed a contract with the National Iranian Oil Company (NIOC) for the development and production of phase 11 of South Pars (SP11).
The project will have a production capacity of 2 billion cubic feet per day or 400,000 barrels of oil equivalent per day including condensate. The produced gas will supply the Iranian domestic market starting in 2021, Total said on Monday.
This contract, which has a 20-year duration, is the first Iranian Petroleum Contract (IPC) and is based on the technical, contractual and commercial terms as per the Heads of Agreement signed on November 8, 2016.
Patrick Pouyanné , chairman & CEO of Total, said the contract makes Total the first international company to sign an IPC with the country following the 2015 international nuclear accord.
Total is the operator of the SP11 project with a 50.1 percent interest alongside the Chinese state-owned oil and gas company CNPC (30 percent), and Petropars (19.9 percent), a wholly owned subsidiary of NIOC.
SP11 will be developed in two phases, with the first phase, with an estimated cost of around $2 billion equivalent, will consist of 30 wells and 2 wellhead platforms connected to existing onshore treatment facilities by 2 subsea pipelines. At a later stage, once required by reservoir conditions, a second phase will be launched involving the construction of offshore compression facilities, a first on the South Pars field.
Since the November 2016 HoA signature, Total has been conducting engineering studies on behalf of the consortium and initiated calls for tender in order to award the contracts required to develop the project by the end of the year.