Italian power company Ansaldo Energia has signed a preliminary agreement with several subsidiaries of the National Iranian Oil Company to collect flare gas from the South Pars gas field for electricity generation.

The Italian firm will collect associated petroleum gas from phase 12 and will convert it into 600MW of electricity in phase one. In phase two, the capacity is expected to be raised to 1000MW.

The memorandum of understanding (MOU) was signed with the National Iranian South Oil Company, Pars Oil and Gas Company, Iranian Central Oil Fields Company and Iran Fuel Conservation Company.

South Pars - the world's largest gas field shared by Iran and Qatar - is estimated to hold 14 trillion cubic metres of gas, with phase 12 one of its biggest in terms of scope.

Nearly all of Iran's gas production - estimated at 202.4 billion cubic metres, according to BP Statistical Review of World Energy 2017 - is used entirely to meet domestic needs of power consumption.