Iran wants to agree a schedule with state-owned China National Petroleum Corp. to begin developing Phase 11 of the country's South Pars gas field after the Chinese company replaced France's Total as the international partner for the project.
The South Pars Phase 11 project is aimed initially at meeting domestic gas demand. Production capacity is envisaged at around 2 billion cubic feet per day of gas, with the project due to come on stream in 2021. When fully operating the scheme is expected also to deliver around 70,000 b/d of condensate.
China's largest energy company had been identified by Tehran as a potential replacement for the French major but no official statement on contract terms had been made by either party. Total withdrew from the $4.8 billion project earlier this year to avoid contravening US sanctions, which came into full force on November 5.
"Negotiations should be carried out with China's CNPC so that it is clarified when it will start operational and executive activities," said Iranian oil minister Bijan Zanganeh in a statement on the official parliamentary news service Icana on Sunday.
Officials from CNPC were unreachable for comment.
CNPC was part of the consortium led by Total alongside Iranian Petropars to develop the field, which is part of the world's largest offshore deposit of proven natural gas in the Persian Gulf.
South Pars has been developed through 18 phases, with a further six projects planned, but work has stalled over the last decade as international companies continued to pull out to avoid US embargoes. If put into full production South Pars would have capacity to deliver 30 Bcf/d of natural gas and almost 1.2 million b/d of condensate in total, according to the Energy Information Administration.
"China's CNPC has officially replaced Total for development of phase 11 of South Pars, but it hasn't practically started the work," said Zanganeh in the Icana report on its website.
Iran holds the world's second-largest proven natural gas reserves behind Russia but has struggled to attract investments due to its international isolation and complex contractual terms. The country has increasingly directed volumes into enhanced oil recovery projects. Re-injection increased by 56% in the 10 years through to 2017, according to the Energy Information Administration.
Meanwhile, China is one of eight major customers of Iranian crude to receive a waiver to continue with purchases from the Islamic republic. Iran produced 3.29 million b/d October, to retain its position as the third largest producer in OPEC behind Saudi Arabia and Iraq, according to a survey by S&P Global Platts.
