Shades of Iran’s gas supremacy over Qatar
For several years, Iran has been ahead of Qatar in extracting gas from the South Pars field. However, experts believe that Qatar’s recent decision to take certain actions in this field may reduce Iran’s opportunities, and if this issue is overlooked, Iran may lose its advantage. The South Pars gas field, known as the South Pars/North Dome Gas-Condensate field in Qatar, is one of the largest natural gas reserves in the world, shared between Iran and Qatar. This vast gas field is located in the Persian Gulf, at a great depth, and holds a significant portion of the world’s gas reserves. The South Pars gas field covers an area of 9,700 square kilometers, with 3,700 square kilometers in Iranian waters and 6,000 square kilometers in Qatari territory. Gas extraction from this field is crucial for both countries, as each relies on it to meet their domestic energy needs and export to global markets. Until a few years ago, Iran lagged behind Qatar in gas extraction from this field. Qatar had been able to exploit the field more extensively due to its access to more modern technologies and significant investments in the oil and gas industry.
Iran’s gas production surpassed Qatar’s
In the early 2000s, Qatar launched massive projects to extract liquefied natural gas (LNG) with the help of international companies and large investments, resulting in a significant increase in its gas exports. However, from the mid-2010s, Iran was able to gradually increase its production by implementing various phases of the South Pars development and adopting new technologies in the gas industry. In recent years, with the inauguration of new phases of South Pars, Iran has managed to bring its gas production from this field on par with, and even surpass, Qatar’s.
The Iranian section of the South Pars field holds 14 trillion cubic meters of gas reserves, along with 18 billion barrels of gas condensates, accounting for approximately 7.5% of the world’s total gas reserves and nearly half of Iran’s gas reserves. The Qatari section of the field holds 36 trillion cubic meters of gas reserves, with the International Energy Agency (IEA) estimating that 26 trillion cubic meters of gas can be extracted from this section.
Iran’s success in overtaking Qatar can be attributed to the implementation of various phases of the South Pars development, domestic investments, and regional and international cooperation. Over the past few years, Iran has successfully completed various phases of this field’s development, including the exploitation of new wells, installation of drilling platforms, and development of gas transmission infrastructure.
Advances in domestic technologies and production increase
Due to international sanctions and restrictions on foreign companies entering Iran, the country was forced to rely on its internal resources and capabilities. This led to the advancement of domestic technologies and increased production, as well as the use of new domestic technologies to enhance efficiency.
This field, which supplies over 40% of Iran’s gas reserves, is of vital importance to the country’s economy. Especially under economic sanctions and international restrictions, Iran’s ability to utilize this vast natural resource has been a crucial lever for meeting domestic energy needs and increasing exports. The development of the South Pars gas field in Iran has been carried out in stages, based on the implementation of various phases.
Each phase of the field’s development includes drilling new wells, installing gas extraction platforms, and constructing transmission lines to refineries. Over the past two decades, Iran has significantly increased its gas production capacity by implementing over 20 phases of the South Pars project. Due to restrictions and sanctions, Iran has been forced to develop domestic technologies for drilling and gas extraction by domestic companies.
Iran’s self-sufficiency in South Pars projects
Iran’s self-sufficiency in South Pars projects has enabled the country to continue these projects without relying on foreign companies. By utilizing advanced drilling technologies and improving wells productivity, Iran has increased gas production from each well. These measures have led to an increase in natural gas and gas condensate production from the South Pars field. The construction and operation of new refineries near the South Pars field have enabled Iran to quickly process and distribute the extracted gas for domestic consumption or export. These refineries have the capacity to process gas for various uses, including electricity generation, petrochemical industries, and liquefied natural gas (LNG) exports.
The South Pars field is not only an important source of energy for Iran but also plays a significant role in the exports of the country’s gas and gas condensate. By expanding the gas transmission network to cities and villages, access to natural gas as a clean and affordable fuel has increased throughout the country. Iran has also sought to develop its export infrastructure to find new regional and international markets for its gas.
Eyes on distant markets
In addition to exporting gas through pipelines to neighboring countries, Iran aims to develop its LNG capacities to export to more distant markets. Alongside natural gas, the extraction of gas condensate from South Pars is a significant source of revenue for Iran. These condensates, which are used in refining and petrochemical industries, are exported to global markets as valuable products.
The development and exploitation of the South Pars gas field have faced numerous challenges, including economic sanctions, financial and technological limitations, and competition with Qatar. However, Iran has relied on domestic companies in the drilling, refining, and manufacturing of equipment related to the oil and gas industry, enabling it to partially meet its needs and achieve relative self-sufficiency in this sector.
Pressure enhancement, a significant challenge
With the continued development of new phases and investment in technological infrastructure, Iran has the ability to maintain and even strengthen its position in the South Pars gas field. However, the issue of pressure enhancement in this field is a fundamental challenge. According to estimates, Iran’s gas production from South Pars will decrease by about 28 million cubic meters each year starting from 2025.
If pressure enhancement projects are not implemented, by 2031, daily gas production from this field will decline by 200 million cubic meters, which means a reduction of current production to one-third. This decline in production and the uncertainty surrounding the $20 billion financing for pressure enhancement projects pose a serious threat to the country’s energy security, especially as Qatar, with a $45 billion investment and the presence of seven major oil companies, has initiated two projects to increase LNG production by 48 million tons.
The pressure enhancement platforms have a capacity of 2 billion cubic feet and can increase pressure by 90 times. Iran aims to build the pressure enhancement platform in its coastal yards, but since the platform will weigh around 20,000 tons and Iran lacks experience in designing, building, and installing platforms with weights over 7,000 tons, the existing infrastructure needs to be upgraded.
It is predicted that Qatar’s gas production will increase by 60% by 2030 with the implementation of these projects. According to the National Iranian Oil Company, feasibility studies and conceptual design of the offshore and onshore pressure enhancement facilities have been completed, and a contract for basic engineering design has been signed with domestic and international consultants. This contract, worth $20 billion, aims to generate $900 billion in revenue for the country.
Based on the plans, the pressure enhancement facilities in Iran will be designed in four hubs with a total capacity of 340 million cubic meters per day. The construction of the first hub will begin next year after completing the studies and tender documents. Meanwhile, Qatar is also developing two projects in the eastern and southern parts of the North Dome field (South Pars). Out of the 48 million tons of LNG produced, 21 million tons have been pre-purchased, and unlike Iran, Qatar exports most of this gas instead of consuming it domestically.
Competition in coming years
Recently, Qatar announced that it will begin developing the northeastern part of the North Dome field and plans to add 16 million tons to its LNG production by 2030. This development could pose a significant challenge to Iran’s competition in the coming years.
The exploitation of the South Pars gas field is of great strategic importance to both Iran and Qatar. In recent years, Iran has managed to catch up with Qatar and even surpass it in some cases by developing new phases and investing heavily. This progress means an increase in Iran’s power to supply domestic energy and export to global markets, which can lead to economic growth and strengthen Iran’s regional and international position. However, experts emphasize that Iran must continue to invest in technology and develop its gas industry infrastructure to maintain this position in the future.
The full article was first published by the Persian-language Iranian Students’ News Agency (isna).