Iran gives Chinese developer ultimatum on stalled gas project

25 June 2012

China National Petroleum Corporation International delays work on South Pars phase 11

Iran has given China National Petroleum Corporation International (CNPCI) a deadline to start work on the delayed 11th phase of its South Pars gas field development.

Oil Minister Rostam Qasemi gave the Chinese group an ultimatum to start developing the project by the end of the Iranian calendar year on 20 March 2013, with local companies on standby to take the contract, the state-run Tehran Times reported.

CNPI won the $4.7bn contract to develop phase 11 from National Iranian Oil Company (NIOC) in 2009, replacing an original deal with France’s Total.

The front-end engineering design (feed) phase was completed in May 2011 by France’s Doris Engineering and Iranian group Petroleum Industry Research Engineering (Pireco).

Market sources indicated in May that NIOC subsidiary, Pars Oil and Gas Company (POGC), had decided to put the project on hold as it was facing several delays.

In April, POGC chairman Mousa Souri told the national press that Iranian companies were on standby to develop the project if CNPCI does not buy the necessary equipment and start work.

The project is to increase the South Pars field’s gas production by 2 billion cubic feet a day and its natural gas liquids (NGL) output by 70,000 barrels a day.

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