The threat of sharp gas price hikes and supply shortages grows as Europe heads into winter without the reassurance of large quantities of cheap gas from Russia. If the European Union (EU) gives final approval at its Nov. 24 meeting to cap gas prices from Russia, such gas supplies could come to a complete halt. Russian state gas company Gazprom has said it will stop all exports of gas to EU countries if the EU introduces the gas price cap. Gas imports from Russia accounted for around 40% of the EU’s gas supply in 2021. Recognizing that it has multiple opportunities to use the situation to its advantage and to its main ally Russia, Iran said last week it was increasing gas production. Operations at the super-massive South Perth natural gas field, focused on the controversial Phase 11. Mohsen Khojastehmehr, Chief Executive Officer of the National Iranian Oil Company (NIOC) said last week: This comment echoes a recent statement by his Javad Owji, Iran’s Oil Minister. His 20-year contract with various domestic and foreign contractors will start this winter. Owji said in August that South Pars Phase 11 is expected to produce 10 million to 11 million cubic meters per day (mcm/d) in the first phase of development. rice field.
From this starting point, Russian support will dramatically increase gas production from Phase 11, as well as from all 23 other phases in South Perth, and we are working closely with Iran’s Ministry of Oil. A senior oil industry official said. OilPrice.com last week. With estimated gas reserves of 14.2 trillion cubic meters (tcm) and 18 billion barrels of gas condensate, South Perth already accounts for about 40% of Iran’s total estimated gas reserves of 33.8 tcm (mostly in southern Fars, Bushehr , and Hormozgan regions) and accounts for about 80% of its gas production. His 3,700-square-kilometer (sq km) South Perth sector (in the form of the 6,000-square-kilometer North Dome) in a 9,700-square-kilometer watershed shared with Qatar is critical to the overall strategy to sustain natural gas production across Iran. . Countries with at least 1 billion cubic meters per day (bcm/d).
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Owji said the original target capacity for Phase 11 was 57 mcm/d, which is still the production target. The first phase of the current development program, according to the project’s lead developer, Petropars, involves the drilling of 30 wells, as well as the fabrication and installation of two production platforms, each containing 15 wells, with a production capacity of 2 billion cubic meters. We aim to produce feet of gas per day (56.6 mcm/d) and 80,000 barrels of liquefied natural gas (LNG). This will require additional liquefied natural gas (LNG) facilities and the construction of two 32-inch pipelines with a total length of 270 kilometers (km). The second phase of the development program will address pressure drops that may occur during his first three years of full production by phasing in pressure equipment associated with various enhanced gas recovery technologies. .
The problems faced by Iran in proceeding with Phase 11, and to a lesser extent all other South Perth phases, were addressed by ensuring that the appropriate equipment, technology, processes and personnel were It was the inability to stay there. Several high-level international companies were involved at some stage in Phase 11 of South Perth, but withdrew due to increased sanctions in 2011/2012 or reimposition of sanctions in 2018. In Phase 11, it came to the attention of the United States after it unilaterally withdrew from the Joint Comprehensive Plan of Action (JCPOA) in May 2018 and when it aggressively resumed sanctions towards the end of the year. rice field. At that time, French supermajor Total (now Total Energies) held his 50.1% stake in the US$4.8 billion Phase 11 project and had already invested around US$1 billion. I was.
An Iranian source, told exclusively by OilPrice.com, said: Once the loan is disbursed, the United States will initiate a full historical investigation of the bank’s dealings with all countries that the United States has blacklisted since 1979, and will tell the French government the same. Naturally, France withdrew from Phase 11, at which point China National Petroleum Corporation (CNPC) automatically took over a stake in Total (50.1%) (automatically done under the terms of the contract). as in). Added to existing 30% stake. The remaining 19.9% of his stake was held by Petropars.
Likewise, CNPC is all set to continue Phase 11 development. my latest book on global oil markets, and the value of the South Pars field. Its present value at the time was $116 billion. $135 billion, Iranian sources say, is now high again.But crucially, the United States increased pressure on China in the trade war Under the unpredictable ex-president, Donald Trump. This, combined with the fact that China was already bound by her new 25-year oversized contract with Iran, Only I broke in September 2019, Beijing was urged to adopt lower publicity where possible over the high profile of Iran’s oil and gas fields. Topping this list was South Pars’ Phase 11, so CNPC officially pulled him out of the project in October 2019.
The key difference now is that Russia is freely involved in Iranian gas projects. The basis for this was shortly before Russian President Vladimir Putin’s visit to Tehran in July. US$40 billion Memorandum of Understanding (MoU) between the Russian gas giant Gazprom and the Iranian National Oil Company (NIOC). Among other deals included in the MoU, Gazprom has invested in his US$10 billion development of the Kish and North Perth gas fields, with a view to the two fields producing more than 10 mcm/d. I pledged my full support to the NIOC. The MoU also pledged his US$15 billion project to increase pressure on the super-massive South Perth gas field on the Iran-Qatar maritime border. Gazprom is also involved in the completion of various liquefied natural gas (LNG) projects and the construction of gas export pipelines.
These deals were designed by the Kremlin to make it fair. More control over future gas supply The gas coming out of Iran may have initially found a home in southern Europe before being transported north to take advantage of the gas supply crisis in European countries.might exist Some interested buyers in Europe Gas originated in Russia or Iran but sold through other intermediaries, possibly as unlicensed gas from Iraq. In Europe, Iran has used this method of “rebranding” to sell its oil as Iraqi oil through decades of sanctions and move it to less tightly monitored ports in southern Europe. rice field. These included oil from Albania, Montenegro, Bosnia and Herzegovina, Serbia, Macedonia and Croatia, which easily moved to larger European oil consumers, including Turkey. Hiding in is another successful way Iran has been able to move oil to where it wants it, and it’s time for Iran and Russia to start doing them.
By Simon Watkins of Oilprice.com
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