Iran contractors ready to develop SP phase 11 as CNPC fails

A senior Iranian oil industry official says Iraniancontractor companies have indicated their readiness to develop phase 11 of the South Pars gas field if the Chinese contractor fails to do so. Mousa Souri, managing director of the Pars Oil and Gas Company, noted that phase 11 of the South Pars gas field is located on the sea border with Qatar and should be developed as fast as possible to preserve Iran’s national interests. The official added that despite pressures put on China National Petroleum Corporation (CNPC), which is the main contractor, the project has not progressed on schedule. “The [Iranian] oil minister [Rostam Qasemi] first gave more time to the Chinese side and negotiations were also held on this issue both in Iran and China,” Souri said. He noted that despite all the time given to the Chinese company, the project did not progress and a 30-day ultimatum has been issued to CNPC in the current Iranian calendar year (started March 20) to start the work and buy the needed equipment. Souri stated that Iran will no longer wait for the Chinese company in case it dawdles as Iranian contractors are ready to take over developing phase 11 of the South Pars gas field. Iran signed a buyback contract with the French Total and Malaysian PETRONAS companies in 2004 for the development of the phase and the construction of its LNG plant. However, due to repeated delays by the two companies, Iran re-assigned the contract to CNPC in June 2009, and the company was supposed to make the phase operational in 52 months (by October 2013). CNPC was also expected to invest about USD 5 billion in the development of the upstream section of phase 11 and was required toprovide all the financial resources needed for the project. With less than 18 months to the expiry of the CNPC contract, the project by the Chinese company shows almost zero progress. The phase is expected to produce 2 billion cubic feet of natural gas and 70,000 barrels of heavy condensate per day. It will also supply a daily total of 1,900 million cubic feet of sour gas as feedstock to Pars LNG plant.