According to the latest Bloomberg report, Total SA has made a US$1 billion bet on natural gas in Iran.
The deal to develop phase 11 of the giant South Pars field is the first investment in Iran by an international energy company since sanctions were eased last year. Total expects it to open the way for further involvement in projects there.
In December, Royal Dutch Shell Plc signed a preliminary agreement to assess three of Iran’s largest oil and gas resources. Last month, Eni agreed to study development of the Kish and Darkhoein fields. BP Plc is reluctant to go into a country on which the US still has some restrictions, while American companies remain unable to invest there.
Under the contract signed on 3 June, Total holds 50.1% of phase 11 of South Pars, which along with Qatar’s North Field comprises the world’s largest single accumulation of gas. The first phase will cost an estimated US$2 billion, with production capacity of 2 billion ft3 a day – equivalent to about 10% of the country’s 2016 production – supplying the domestic market starting in 2021.
Increased gas production opens new opportunities for exports. Three potential LNG projects – one of which involved Total – fell victim to the last tightening of sanctions against Iran and could be revisited.
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