The Farzad B gas and condensate field is spread across the maritime boundary of Iran and Saudi Arabia in the Persian Gulf.
The Iranian portion of the field was originally planned to be developed by an Indian consortium led by ONGC Videsh (OVL), the overseas investment arm of India’s state-owned ONGC, which had discovered the field in 2008 as part of an exploration service contract (ESC) for the Farsi offshore block, awarded by the National Iranian Oil Company (NIOC) in December 2002.
Although a master development plan (MDP) of the Farzad-B gas field was submitted by OVL in April 2011, negotiations on a development service contract (DSC) remained inconclusive due to difficult terms and international sanctions on Iran.
NIOC has finally decided to develop the field through an Iranian company as its subsidiary Pars Oil and Gas Company awarded a buyback contract worth £1.26bn ($1.78bn) to Iran-based Petropars Group for the development of the Farzad B gas field in May 2021.
As per the contract, the field is expected to produce up to 28 million cubic meters (mcm) of sour gas a day over a period of five years.
Location and reservoir details
The Farzad B gas field is located in the Farsi block, approximately 20km away from Farsi Island, Iran. The Farsi block is spread over 3,500km2 in the Persian Gulf with the water depth ranging from 20m to 90m.
The offshore field is estimated to hold approximately 23 trillion cubic feet (tcf) of recoverable gas containing approximately 5,000 barrels of gas condensate per billion cubic feet (bcf) of gas.
As many as four wells were drilled during the exploration phase. The fourth well, drilled in the southwestern part of the block, contains carbonate reservoirs of the Lower Triassic/ Upper Permian formations. The well was tested at a flow rate of 19 million cubic feet (mcf) of gas a day.
The ONGC Videsh-led consortium submitted the commerciality report for the gas discovery to the National Iranian Oil Company (NIOC) in December 2007. NIOC declared the commercial viability of the Farzad B gas field in August 2008.
The OVL-led consortium was awarded the ESC for the Farsi block in December 2002. OVL was the designated operator holding a 40% interest in the consortium while the other partners were Indian Oil Corporation (IOCL, 40%) and Oil India (20%). The exploration period under the ESC expired in June 2009.
The consortium and Iranian authorities were engaged in phase one negotiations for a DSC of Farzad B gas field till November 2012 which didn’t materialise due to difficult terms in the DSC and international sanctions on Iran.
The negotiations resumed for developing the Farzad B gas field under an Iran Petroleum Contract (IPC) in April 2015. A revised provisional master development plan (PMDP), based on the new seismic data and updated geological and geophysical (G&G) studies on the field, was submitted to NIOC’s subsidiary Pars Oil and Gas Company (POGC) in March 2017.
NIOC came up with a proposal to develop the gas field under the development service contract (DSC) in April 2019. However, the technical studies on the field, required for commercial negotiations, could not be completed due to the US sanctions on Iran from November 2018 onwards.
NIOC decided to award the field development contract to an Iranian company in February 2020.
Field development plan
The initial field development plan involves the drilling of eight production wells, the installation of the main platform and a secondary wellhead platform, and approximately 3km of infield flowlines connecting the platforms. The main platform will house liquid separation facilities.
A 230km-long, 36in-diameter subsea pipeline will be laid to transport the sour gas from the main platform to the shore, while a 230km-long, 10in-diameter subsea pipeline will be constructed to export condensate from the main platform to the onshore facilities.
The onshore facilities to be developed as part of the project will include receiving equipment for the sour gas and condensate, and the pipelines to transport sour gas and condensate to refineries located in the Pars 2 region in Kangan, Iran.
The gas condensate separated from the sour gas will be transported to the phase 12 and phase 19 refineries of the South Pars complex onshore for stabilisation. The South Pars complex, located in southern Iran, processes the wellstream from the South Pars gas field.
The contract scope for Petropars includes the drilling of eight production wells, construction and installation of the main platform and a wellhead platform, as well as the laying of infield flowlines and export pipelines to the shore.
Earlier, Petropars bagged the contract for engineering, exploration, and basic design of the Farzad B gas field development project in December 2019.