Total has entered into a contract with the National Iranian Oil Company (NIOC) to develop phase 11 of South Pars (SP11), which is claimed to be the world's largest gas field.

The new project is said to have a production capacity of 2 billion cubic feet per day or 400,000 barrels of oil equivalent per day, including condensate.

The contract is based on the technical, contractual and commercial terms as per the heads of agreement signed in November 2016.

With an estimated cost of around $2bn, the SP11 project will be developed in two phases.

The first phase of the project will include 30 wells and two wellhead platforms connected to existing onshore treatment facilities by two subsea pipelines.

Based on reservoir conditions, the offshore compression facilities will be constructed under the second phase.

With a 50.1% stake, Total is the operator of the SP11 project. Chinese state-owned oil and gas CNPC owns 30% interest in the project, while NIOC subsidiary owns the remaining 19.9% stake in the country.

Expected to come online in 2021, the produced gas from the field will be supplied to the Iranian domestic market for a term of 20 years.

Total chairman and CEO Patrick Pouyanné said: “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.

“We are proud and honored to be the first international company to sign an IPC, which offers an attractive commercial framework, following the 2015 international nuclear accord (JCPOA) and to therefore contribute to the development of relations between Europe and Iran.”