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Phase 1 South Pars Gas Project Online in March

Source: PIN 2/4/2004, Location: Asia

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TEHRAN-- The much-delayed Phase 1 of Iran's giant South Pars gas field will be completed by March to produce per day about 28.3 million cubic meters of gas for domestic consumption and 40, 000 barrels of condensate and 200 tons of sulphur for export. "Phase 1 is to be completed by the end of this Iranian year in March," said Gholam-Reza Manuchehri, Managing-Director of Petropars Company.

The contract for the project was awarded to Petropars, a quasi-private company registered in the British Virgin Islands, in 1998. Since then, it has suffered a number of delays and financing difficulties.

To get the project back on track, John Brown Engineering was brought in but the company withdrew in January 2002 due to payment delays from Petropars. The delays and cost overruns have caused costs to skyrocket from an estimated 780 million dollars to about one billion dollars. The gas produced in each phase of South Pars costs more than 750 million dollars, Manuchehri said, adding: “Each cubic meter of gas will replace one liter of oil products in Iran’s energy basket.” “The replacement will earn around five million dollars,” said the official. Manuchehri said ethane was a strategic product of South Pars Gas Field. “We will offer 40,000 barrels per day of gas condensates from Phase 1 of South Pars to earn 1.2 billion dollars.” He said that Iran would export gas from South Pars to European nations, Turkey, Pakistan and India. “We will also export liquefied natural gas (LNG) from South Pars.” Another project involving Petro Pars with Italy's ENI is running more smoothly,

ENI is the operator of Phases 4 and 5 with a 60 percent stake while Petro Pars and state-owned Naftiran Intertrade Company each have a 20 percent share.

The contract, which has been valued at 3.8 billion dollars including capital costs, finance charges and remuneration, was signed in 2000 with a target of producing gas from September 2004.

The South Pars field in the Persian Gulf has been divided into 25 phases. Iran sits on the world's second largest proven gas reserves after Russia. The Iranian government is hoping to boost gas production to 292 billion cubic meters (10.311 trillion cubic feet) in 2010.

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