MOSCOW (MRC) -- France's Total signed a deal with Tehran on Monday to develop phase 11 of Iran's South Pars, the world's largest gas field, marking the first major Western energy investment in the Islamic Republic since the lifting of sanctions against it, reported Reuters.
Total will be the operator with a 50.1 percent stake, alongside Chinese state-owned oil and gas company CNPC with 30%, and National Iranian Oil Co subsidiary Petropars with 19.9%.
The project will have a production capacity of 2 billion cubic feet per day, or 400,000 barrels of oil equivalent per day including condensate, Total said in a statement, adding that the gas will supply the Iranian domestic market starting in 2021.
The first stage of the South Pars development will cost around USD2 billion, Total added.
The project will cost up to USD5 billion and production is expected to start within 40 months, Iran's oil ministry said in a statement.
"This is a major agreement for Total, which officially marks our return to Iran to open a new page in the history of our partnership with the country," Total Chief Executive Patrick Pouyanne said.
The offshore field was first developed in the 1990s. Total was one of the biggest investors in Iran until the country drew international sanctions in 2006 over suspicions that Tehran was trying to develop nuclear arms.
Total signed an initial agreement with Tehran on Nov. 8, a day after the U.S. presidential election victory of Donald Trump, who had criticized the deal lifting sanctions against Iran.
Total had delayed the final investment decision as it waited for the Trump administration to renew the U.S. sanctions waivers.
Trump extended sanctions relief for Iran in May, but is imposing new measures against Iran's ballistic missile program.
Iran, the third-largest producer in the Organization of the Petroleum Exporting Countries, hopes its new petroleum contracts will attract foreign companies and boost oil and gas output after years of under-investment.
A senior Iranian official said at the signing ceremony that he hoped the deal with Total would encourage other international companies to invest in Iran’s oil and gas fields, which need tens of billions of dollars of foreign money.
As MRC informed before, in March 2016, The National Petrochemical Company (NPC) of Iran and France-based Total signed an memorandum of understanding (MoU) to build a petrochemical complex in Iran. The complex will include a world-scale steam cracker unit in the coastal area. It will be based on a combination of feedstocks comprised of ethane, naphtha and LPG, as well as other available feed. In addition to steam cracker unit, the complex will include relevant downstream units for supplying its products to domestic and international markets.
Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.
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