TEHRAN (Iran News) Paknejad emphasized that the contract, signed seven months into the 14th administration’s tenure, fulfills a long-standing ambition. “This is a pivotal step toward achieving the quantitative goals outlined in the Seventh Development Plan,” he said, noting that Iran aims to increase its daily raw gas production to 1.34 billion cubic meters by the plan’s end.

The South Pars field, which Iran shares with Qatar, supplies roughly 70% of the nation’s gas, fueling households, small and large industries, and power plants. However, three decades of joint extraction have led to a natural decline in reservoir pressure, threatening output levels. Paknejad warned that without intervention, production could drop by the equivalent of one South Pars phase by 2027 and 1.5 phases by 2029. “From 2027, we’ll see a reduction equivalent to one phase, exacerbating gasoline imbalances since 40% of Iran’s gasoline comes from South Pars condensates,” he added.

To meet the 1.34 billion cubic meter target within four years, an average annual investment of $19 billion is required, totaling $75 billion over the period. Of this, $53 billion will fund new gas field development, while $22 billion—including the $17 billion South Pars project—will sustain existing production capacity. Paknejad stressed the need for meticulous planning to leverage national financial resources, citing potential funding from the National Development Fund and energy-intensive industries like petrochemicals, as stipulated in the Seventh Development Plan.

The minister also highlighted a competitive challenge from Qatar, which has already begun preparing platforms and turbo-compressors for pressure boosting. “In two years, Qatar could increase production from its North Dome section, potentially drawing gas from Iran’s side due to pressure disparities,” Paknejad cautioned. This urgency underscores the strategic importance of the South Pars initiative.

The pressure boosting scheme comprises seven hubs, each with four platforms: one for power generation, one for accommodation, and two for compression units. Each platform will house four high-capacity SGT-700 turbo-compressors, totaling 56 across the project. While some components will be sourced domestically, technology transfers from foreign partners will also play a role. Each hub is estimated to cost $2.5 billion, with the full $17 billion investment projected to generate $780 billion in field revenue by 2056—an economic boon Paknejad described as too critical to delay.

The contracts were signed with four major Iranian contractors—OIEC, Mapna, Khatam-al Anbiya, and Petropars—who will serve as general contractors, subcontracting to private firms to maximize local expertise. Paknejad noted their prior experience in South Pars development as a key asset. He contrasted this with preliminary $400 million contracts from the 13th administration, which he criticized as underfunded and ineffective, saying, “Not a cent was spent.”

The project’s financial model will follow the “IPC” (Iran Petroleum Contract) framework, with negotiations underway with the National Development Fund for “EPCI” (Engineering, Procurement, Construction, and Installation) agreements. Technologically, the initiative will elevate Iran’s capabilities, particularly in designing and building heavy platforms weighing 7,000–8,000 tons—double the 3,500-ton limit of past projects. With 420,000 tons of marine structures and 600 kilometers of subsea pipelines planned, 70% of the work will be executed by Iranian companies, creating a nationwide industrial boom.

Economically, the project promises 17,000 direct jobs and 50,000 indirect jobs, alongside sustained energy security. Paknejad urged swift financial approvals from the National Development Fund and Budget Organization to kickstart operations, warning that delays could jeopardize national interests.

Following his address, Deputy Oil Minister Hamid Bovard, representing the National Iranian Oil Company, signed the contracts with the four firms. This $17 billion endeavor not only aims to offset pressure declines and prevent gas migration to Qatar but also to stabilize gas and gasoline supplies, reinforcing Iran’s position in global energy markets. As the South Pars field enters a new era of sustainable exploitation, its success could redefine Iran’s economic trajectory for decades to come.

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Ali Akbar Majed, head of POGC’s Oil and Gas Engineering Department said planning is underway for drilling a new descriptive well at the northern part of the mentioned field to assess the possibility of new reserves, the POGC portal reported on Tuesday.

According to Majed, identifying and exploring undeveloped parts of the South Pars gas field is among POGC’s top programs for maintaining production from this joint field.

“Due to the natural decrease in the pressure of the South Pars field gas reservoir following its production over the last 20 years the production rate of this reservoir will inevitably decline even more in the coming years, so the company has put exploring the undeveloped parts of the field on the agenda by drilling new wells,” the official said.

He further noted that last year another descriptive well was drilled in the eastern part of the South Pars gas field and the results of the drilling operations will become available to the Oil Ministry in the near future.

South Pars gas field, which Iran shares with Qatar in the Persian Gulf, covers an area of 9,700 square kilometers, 3,700 square kilometers of which are in Iran’s territorial waters and the remaining 6,000 square kilometers, called North Dome, are situated in the Arab country’s territorial waters.

The field is estimated to contain a significant amount of natural gas, accounting for about eight percent of the world’s reserves, and approximately 18 billion barrels of condensate.

The development of the South Pars field started in 1998 and 29 different phases were defined for the project along with a separate oil block. The field, however, is currently divided into 24 standard offshore phases, the output of which is processed by 14 gas refineries on land.

Since the beginning, the field’s development project has gone through so many ups and downs and many foreign and domestic companies have contributed to the completion of the field’s various phases.

Despite all the U.S pressures which led to the departure of almost all of the foreign companies from the project, and despite all the technical and engineering problems faced in the process, Iran has managed to proudly finish the development of almost all the phases of the field and even the field’s oil layer is also producing nearly 50,000 barrels per day (bpd) of oil.

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While starting operation, platform 24A is planned to produce 500 million cubic feet (14.2 million cubic meters) of gas per day.

Installation of this 2,300-ton platform, compared to the other platforms of South Pars, was the fastest one, Farhad Izadjou, the operator of phases 22-24, announced.

Phases 22-24 are expected to produce 56 million cubic meters of sour gas, 75,000 billion barrels of gas condensate, and 400 tons of sulfur per day, in addition to 50 million cubic meters of methane, 2,900 tons of LPG and 2,750 tons of ethane.

South Pars is divided into 24 standard phases of development in the first stage. Most of the phases are fully operational at the moment.

The huge field, which Iran shares with Qatar in the Persian Gulf, covers an area of 9,700 square kilometers, 3,700 square kilometers of which, called South Pars, are in Iran’s territorial waters. The remaining 6,000 square kilometers, called North Dome, are situated in Qatar’s territorial waters.

The field is estimated to contain a significant amount of natural gas, accounting for about eight percent of the world’s reserves, and approximately 18 billion barrels of condensate.

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