Total signs contract with NIOC for South Pars

TOTAL has signed a contract with the National Iranian Oil Company (NIOC), to develop phase 11 of Iran’s South Pars gas field (SP11), the largest gas field in the world.

SP11 will have a production capacity of 2bn ft³/d of gas, or 400,000 boe/d including condensate. The 20-year contract is the first Iranian Petroleum Contract (IPC) to be signed by an international company. Total will operate SP11 with a 50.1% interest. China National Petroleum Corporation (CNPC) will hold a 30% interest, and NIOC subsidiary Petropars will hold 19.9%.

The companies had previously signed a heads of agreement in November last year, and the terms of this final contract are based on the technical, contractual and commercial terms set out in the original agreement.

The consortium plans to develop the field in two stages. The first stage, with an estimated cost of US$2bn will include 30 wells and two wellhead platforms. These will be connected to existing onshore treatment facilities by two subsea pipelines. The second stage will include offshore compression facilities, and will be completed when necessary for the field conditions.

Since the November signing, Total has conducted a number of engineering studies and initiated calls for tender on behalf of the consortium. The consortium plans to award the contracts required to develop the field by the end of 2017.

“This is a major agreement for Total, which officially marks our return to Iran to open a new page in the history of our partnership with the country. We are proud and honoured to be the first international company to sign an IPC, which offers an attractive commercial framework, following the 2015 international nuclear accord (JCPOA) and to therefore contribute to the development of relations between Europe and Iran,” said Total CEO and chairman Patrick Pouyanné.