July 18 (UPI) -- Given the spillover from the natural gas deal with Total, it's Iran that wins with its first post-sanctions contract, an energy company manager said.
In its first contract in the post-sanctions era, consortium of French energy company Total, China National Petroleum Corp. and Petropars Ltd., a subsidiary of the state-run National Iranian Oil Co., signed a 20-year contract in early July to help develop parts of the giant South Pars natural gas field in the Persian Gulf.
Petropars said part of the development deal involves stimulating the pressure at South Pars to facilitate stronger gas production. Hossein Taqipour, a senior manager for Petropars, said the development will have a profound spillover effect for parts of the domestic energy sector.
"Construction of pressure-boosting platforms at Phase 11 of South Pars will be just the beginning and Iranian companies and contractors will be able to cash in on cooperation with companies building pressure-boosting platforms for the future," he was quoted by the official Islamic Republic News Agency as saying.
All of the natural gas from Phase 11 is slated for the Iranian economy, the world's third largest gas market.
The managing director said that, since South Pars has 24 development plans spread out over 42 platforms, pressure stimulation has the potential to significantly boost output. Development of Phase 11 means production is extended another 20 years.
Roughly $5 billion in investments are envisioned for Phase 22, though Taqipour said costs could come down through the development life cycle.
"Iranian contractors need to improve their potentials in order to reduce costs and duration of manufacturing and installation in their own yard," he said.
With Iranian President Hassan Rouhani, who helped steer the post-sanction economy, earning a second term in office earlier this year, the Total-led deal cleared a path for future investments from foreign energy companies. Rouhani's administration set a goal of sign 10 new development deals by the end of the Iranian calendar year, March 20.
Petropars Ltd. is under sanctions pressure from the United States.