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Five foreign firms to bid for phase 11 of South Pars gas field

Tehran, Feb 24, IRNA -- Five major foreign firms are to take the bid for projects to develop phase 11 of South Pars gas field, said Assadollah Salehiforuz, managing director of Pars Oil and Gas Company here on Monday.

Salehiforuz told IRNA on the sidelines of the 12th International Oil, Gas and Petrochemicals Forum that British Petroleum (BP), French TotalFinaElf, Malaysian Petronas, Norwegian Statoil and Italian Eni are in stiff competition to win the bid for the development project.

He said that the technical proposals, offered by the companies, have been found justifiable.

He added that project for the development of phase 12 of South Pars gas field too would be on tender and would include drilling an evaluation well. He said the bidders would be provided with necessary information on specifications of the project.

Oil Minister Bijan Namdar Zanganeh had said in southern province of Bushehr on Saturday that Iran is hard at work to tap its huge hydrocarbon reserves, bidding to establish itself as a major gas producer in the world, given the rising global demand for a cleaner and environment-friendly fuel.

The country has already sealed several deals, totalling 10 billion dollars, with giants such as TotalFinaElf, BP and ENI, leaving the United States miffed since it maintains a unilateral sanction against the Islamic Republic.

Zanganeh had said at the inauguration of Phases 2 and 3 of the South Pars in Assalouyeh that 'this success above all indicates the failure of those who sought to block the development of the Iranian oil industry by imposing sanctions'.

"A growing demand for natural gas in the world on one side and Iran's massive natural gas reserves on the other require that Iran forge an active interaction with the world's big consumers of gas and establish itself as a reliable gas supplier," he added.

The oil minister also outlined plans for the conclusion of further gas deals to the tune of 10 billion dollars with Iranian and foreign investors to develop the South Pars field which is estimated to hold 14 trillion cubic meters of gas.

Iran sits on the second biggest proven gas reserves of the world -- put around 28 trillion cubic meters -- after Russia. Half of this lies in an offshore field which the country shares with Qatar in the Persian Gulf.

So far agreements have been signed for development work in 10 phases, which Iran hopes to bear 260 million cubic meters of natural gas and 4.8 million tons of liquefied gas daily on top of 400,000 barrels of gas condensates and 3.5 million tons of ethane.

These products will have a value of 7.2 billion dollars, including 4.5 billion dollars in revenues coming from the exports of natural gas and gas condensates, Zanganeh said.

The Islamic Republic has already been exporting natural gas to Turkey under a 30-billion-dollar deal, according to which Iran is committed to supply 10 billion cubic meters (350 billion cubic feet) of gas per year.

The two countries launched in December 2001 a 2,577-kilometer pipeline, running from the northeastern city of Tabriz to Ankara, which supplies gas from southern Iran near the Persian Gulf.

The gas flow, however, hit a snag after the then Turkish Energy Minister Zeki Cakan announced last September that his country had halted imports because of their poor quality. Tehran and Ankara ironed out the difference later.

Officials have said that Iran looked at Turkey as 'a gateway for the export of its natural gas to European markets'. The country also bids to export gas to India.


President Mohammad Khatami on Saturday inaugurated phases 2 and 3 which he described as among the 'biggest projects of Iran's oil and gas industry'.

The two phases will produce 54 million cubic meters of natural gas, 80,000 barrels of gas condensates and 400 tons of sulfur per day. Iran hopes to earn 1.32 billion dollars annually from these units.

The projects were carried out by French TotalFinaElf with a 2.12 billion dollar investment in partnership with Malaysian Petronas and Russian Gazprom.

The investments were made in buy-back deals. In this system, the foreign investor does not hold equity but recoups its spending and the profit involved once output starts.

Zanganeh said there were also plans for the construction of LNG (liquefied natural gas) and GTL (gas to liquid) units as well as a refinery for gas condensates in Assalouyeh.

Meanwhile, phases 11 to 18 of the South Pars will be implemented in the 'not far future', the Iranian oil minister added.

Deputy Oil Minister Mehdi Mir-Moezzi said that the tender for phase 11 will be issued in the coming weeks, at the most before the end of the Iranian year on March 20.

He announced TotalFinaElf, British Petroleum, Italy's ENI and Statoil of Norway, as the bidders.

Iran's Petropars, which was once mired in a row of alleged kickbacks, has undertaken to carry out phases one, six, seven and eight. The company also accounts for the joint implementation of Phases four and five with ENI.

Phases nine and 10 have been awarded to South Korea's Lucky Goldstar.

Zanganeh said there were also plans for the establishment of petrochemical plants in Assalouyeh with a five-billion-dollar investment in the initial phase. He said last August that deals, totalling three billion dollars, had been signed.

Press later cited him as saying that National Petrochemical Company (NPC) had signed a 354-million-dollar deal with French Technip to build a light polyethylene unit.

... Payvand News - 2/24/03 ... --

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