Total sets South Pars development schedule

Total has announced further details of its development plans for Iran's giant South Pars gas field.

South Pars will be developed in phases, with first gas expected in 2001 (OGJ, Feb. 9, 1998, p. 28).

National Iranian Oil Co. (NIOC) is responsible for Phase 1 development and the Total association for Phases 2 and 3. Total is operator for a development group that includes Russia's Gazprom and Malaysia's Petronas. Total will be operator until start-up and then will take on a technical assistance role, as yet to be defined.

The French firm also has disclosed its schedule for various components of the project.

By mid-1998 eocene studies to determine where development should be carried out will be completed, and one delineation well on each of the two blocks will be drilled. Production and onshore gas treatment trains will start up in 2001 and 2002.

Iran will take the dry gas production for its network. The condensates will be exported by the Total association. If need be, condensates production will be supplemented with oil from other Iranian fields.

Development

Total's South Pars project manager, Michel Naylies, said that the project is very similar to Sirri development, of which he was in charge. The difference is that, in South Pars, the gas/condensate separation plant will replace the LNG plant built for Sirri production.

"The problems are the same," he said. "What changes is the country and the area."

The large size of the acreage makes correlation difficult, indicated Naylies, adding that it is the largest offshore gas field operated by Total to date.

NIOC has divided South Pars into blocks measuring 11.8 km x 11.8 km. The giant field consists of the same Khuf reservoir as Qatar's adjacent North field.

Total's drilling campaign calls for installation of one minimum-facilities platform in each of Phases 2 and 3. Each platform will drill 10 deviated wells.

Phases 2 and 3 are each expected to contribute 1 bcfd to production from the field.

The four onshore gas treatment trains are scheduled to start-up successively in June 2001, September 2001, February 2002, and June 2002. Under the master development plan annexed to the contract, obligations for South Pars are the same as for the Sirri field.

Start-up of Phase 2 development is set for June 2001, 44 months after contract signature; start-up of phase 3 is slated for September 2001, 47 months after contract signing.

Engineering, design

The call for tenders will be made in mid-1998, and the engineering and construction contracts will be awarded late in 1998 for platforms, pipes, and site preparation for the onshore plant and gas and liquid separation unit, to be fitted with two trains per phase. Naylies indicated that Total is looking for major groups with full-range capabilities.

Iran's preference is for 30% of the contract to be carried out in Iran for the onshore facilities.

Capital costs for the project are estimated to be: $450 million for drilling, $100 million for the platforms, $270 million for pipelines, $1.1 billion for onshore facilities, and $80 million for "general costs."

Pipeline corrosion prevention will be accomplished by installing a 41/2-in. piggyback glycol line on the gas transport line from the platforms to shore.

Onshore facilities will be built by NIOC subsidiary Pedec, including port installations for shipping condensates and sulfur. Pedec is also building a dry gas treatment plant at Kangan, to be connected to Iran's gas network, and a compressor station near the plant.

Total in the region

The Middle East accounts for 677 billion bbl of Total's total oil reserves base of 1.019 trillion bbl, and 48.9 trillion cu m of its 144 trillion cu m of gas reserves.

Christophe de Margerie, president of the firm's Middle East division, said Total has long been involved in most countries of the region-Abu Dhabi, Qatar, Dubai, Oman, and Yemen. Total is also involved in Iraq, where it is set to develop Nahr Omar field when international sanctions are lifted, and more recently in Kuwait, where it has taken a foothold through a technical assistance contract (see Watching the World, this page).

"In our strategy aiming to penetrate new countries where there is huge potential to develop a long-term policy," said de Margerie, "what was missing in our portfolio was Iran."

Total will now have opportunities to develop synergies between Qatar's North field and Iran's South Pars, says de Margerie, and perhaps even enter a deal with Qatar to sell the gas to other countries.

The synergies could go as far as the Caspian Sea, where Total is involved in two projects in Azerbaijan and one in Kazakhstan. It also is discussing the possibility of exploration contracts with Turkmenistan.

"We could use our strong Middle East base to become an attractive partner in the Caspian area," pointed out de Margerie, whose vision for Total is to close the loop linking Middle East to Central Asia.