TEHRAN – Iran has ruled out introduction of the controversial South Pars gas field’s phase 11 to foreign investors under the terms of the recently unveiled Iran Petroleum Contract (IPC) model, the SHANA news agency reported on Sunday.
Iranian oil decision makers let slip the news in the ceremony held in Tehran to introduce the IPC model to foreign investors. Instead, contractors are expected to tender for the phase.
According to an initial development schedule, phase 11 is envisaged to have an approximate sour gas output of 56 million cubic meters (mcm) and 80,000 barrels of gas condensate per day.
There is a long story behind the phase. In 2000, National Iranian Oil Company (NIOC) and the French Total inked a memorandum of understanding (MOU), hereby the French company committed itself to develop the upstream portion of the phase and set up a 10-milllion-ton LNG plant.
Close on the heels of the MOU, the Malaysian Petronas showed interest in the project, resulting in a tripartite development plan, according to which NIOC, Total, and Petronas agreed to develop 50 percent, 40 percent, and 10 percent of the upstream portion of the project apiece.
However, in the years following the contract, Total proposed new pricing over the project considering increasing steel prices and projects outlays, a proposal which faced Iran’s no.
The project was finally left to the Chinese CNPC with an estimated value of $4 billion, a contract which was nullified unilaterally by NIOC due to the investor’s repeated delays.
In a recent development, NIOC announced that negotiations over transferring the drilling operation of the project to Petropars and another Iranian company have reached its final stages.