Speaking at a ceremony to sign contracts for a pressure-boosting
project at the South Pars gas field, Paknejad emphasized the urgency of moving
forward with the initiative to counter declining production at the shared
reservoir.
"The presence of our esteemed president at this event is a great
source of encouragement for all industry workers," he said. "With
today's signing, we are taking a significant step toward securing the future of
gas production from South Pars."
Under Iran's Seventh Development Plan, the country aims to expand its
gas fields while simultaneously maintaining output at existing fields to
prevent production decline, Paknejad noted. The combined development and
maintenance efforts will require a total investment of $75 billion, with $53
billion earmarked for new field development and $22 billion for sustaining
production capacity, including the South Pars pressure-boosting project.
South Pars Pressure-Boosting Crucial to Prevent Output Decline
Paknejad warned that without immediate action, production from South
Pars would decline by the equivalent of one full development phase annually
starting in 2027. By 2029, this decline could reach 42 million cubic meters per
day, equivalent to 1.5 phases per year.
He stressed that maintaining gas production was essential for Iran’s
energy security, as South Pars condensates provide a significant share of
feedstock for refineries, including the Persian Gulf Star Refinery, which plays
a crucial role in domestic gasoline production.
"Failure to implement this project would exacerbate Iran’s energy
imbalance, particularly in gasoline supply," he said. "The success of
the Seventh Development Plan’s gas and fuel production targets hinges on this
initiative."
The pressure-boosting plan consists of seven hubs, each containing
four platforms: a power generation platform, an accommodation platform, and two
platforms hosting turbo-compressors. A total of 56 high-powered
turbo-compressors will be installed across the hubs, with the majority
manufactured domestically and some sourced from international partners.
Each hub will cost approximately $2.5 billion, amounting to a total
investment of $17 billion. The project is expected to generate an additional
$780 billion in revenues from South Pars by 2056.
Contracts Awarded to Domestic Firms
Paknejad announced that contracts for the project had been awarded to
four major Iranian companies: Petropars, Oil Industries Engineering and
Construction (OIEC), MAPNA Group, and Khatam al-Anbiya Construction
Headquarters.
“These firms have extensive experience in South Pars development,” he
said, adding that they would subcontract portions of the work to private-sector
firms to maximize local participation.
He acknowledged that under the previous administration, preliminary
agreements worth $400 million were signed for the pressure-boosting project but
remained unfunded. However, the current government has restructured the
contracts under an Integrated Petroleum Contract (IPC) framework and six
Engineering, Procurement, Construction, and Installation (EPCI) agreements,
which were formalized on Saturday.
While the IPC contract has its own financing mechanism, Paknejad said
funding for EPCI agreements would rely on the National Development Fund of
Iran. The government is working to finalize financial arrangements through
coordination with the fund and the Supreme Economic Council.
The project will require the fabrication and installation of 420,000
metric tons of offshore structures—more than double the total installed weight
in South Pars over the past two decades. It also involves laying 600 kilometers
of subsea pipelines and producing over half of the required turbo-compressors
domestically.
Paknejad estimated that the initiative would create 17,000 direct jobs
and 50,000 indirect jobs while boosting Iran’s technological capabilities in
offshore platform construction.
He urged President Ebrahim Raisi to expedite the approval of financing
agreements with the National Development Fund and the Supreme Economic Council
to ensure the project’s swift execution.
“If we act promptly, we can maintain our share of this vital joint gas
field and prevent energy imbalances while achieving the Seventh Development
Plan’s strategic goals,” he said.