South Pars/North Dome Gas-Condensate field

1. Geographic and Geological Overview:

Location:

The South Pars/North Dome gas field, situated in the Persian Gulf, boasts a strategic geographic location at
approximately 26°40′N 51°30′E. Shared between Iran and Qatar, it spans a vast expanse over the continental shelf,
making it one of the most significant transboundary hydrocarbon reserves globally.

**Geological Formation:**

This colossal gas field resides within the Persian Gulf basin, characterized by intricate geological features. The
reservoir structure predominantly comprises carbonate rocks and sandstone, creating a complex and challenging
environment for exploration and extraction. Anticlines and fault zones further enrich the geological tapestry, offering
both obstacles and opportunities for hydrocarbon recovery.

The formation of the South Pars/North Dome gas field is a testament to the intricate geological processes that have
shaped the region over millennia. The interaction of tectonic plates and the deposition of organic-rich sediments
have led to the creation of a reservoir with immense hydrocarbon potential. Understanding the geological nuances is
crucial for effective exploration and sustainable production.

2. Acquisition, Production, Remaining Reserves:

**Acquisition:**

Development and exploration activities in the South Pars/North Dome field have been jointly undertaken by Iran and
Qatar, showcasing a rare example of international collaboration in the energy sector. The delineation between the
two is marked by the Iranian South Pars and the Qatari North Dome. This collaborative effort has transformed the
region into the world's largest gas field.

The agreement between Iran and Qatar on the joint exploitation of the South Pars/North Dome gas field has been a
cornerstone of regional cooperation. Both nations have navigated political and technical challenges to maximize the
potential of this shared resource. The collaboration involves the sharing of infrastructure, technology, and expertise,
fostering a unique partnership in the global energy landscape.

**Production:**

The production prowess of South Pars/North Dome is unparalleled, significantly contributing to the overall gas
output of both Iran and Qatar. Utilizing cutting-edge drilling technologies, including offshore platforms and subsea
installations, production operations are conducted with precision and efficiency. The gas extracted is primarily
methane, with additional components such as ethane, propane, and condensates.The continuous improvement of
extraction technologies has allowed for the tapping of deeper and more challenging reservoirs, ensuring sustained
production levels. Both nations have invested in advanced drilling equipment, reservoir monitoring systems, and
enhanced recovery techniques to optimize production from this immense resource.
** Reserves:** According to International Energy Agency (IEA), the combined structure is the world's largest
gas field.[1]

In-place volumes are estimated to be around 1,800 trillion cubic feet (51 trillion cubic metres) gas in place and
some 50 billion barrels (7.9 billion cubic metres) of natural gas condensate in place.[12] With in place volumes
equivalent to 360 billion barrels (57 billion cubic metres) of oil[13] (310 billion boe of gas and 50 billion boe of
natural gas condensate) the field is the world's biggest conventional hydrocarbon accumulation.

The field recoverable gas reserve is equivalent to some 215 billion barrels (34.2 billion cubic metres) of oil and it
also holds about 16 billion barrels (2.5 billion cubic metres) of recoverable condensate corresponding of about
230 billion barrels (37 billion cubic metres) of oil equivalent recoverable hydrocarbons.

The gas recovery factor of the field is about 70%, corresponding of about 1,260 trillion cubic feet (36×1012 m3) of
total recoverable gas reserves which stands for about 19% of world recoverable gas reserves. [14]

The estimates for the Iranian section are 500 trillion cubic feet (14×1012 m3) of natural gas in place and around
360 trillion cubic feet (10×1012 m3) of recoverable gas which stands for 36% of Iran's total proven gas
reserves and 5.6% of the world's proven gas reserves.[12]

The estimates for the Qatari section are 900 trillion cubic feet (25×1012 m3) of recoverable gas which stands for
almost 99% of Qatar's total proven gas reserves and 14% of the world's proven gas reserves. [15]

Table 1 - South Pars/North Field gas reserves

In-place gas reserve Recoverable gas reserve

Trillion cu ft
cu km (km³) cu km (km³) Trillion cu ft (ft³)
(ft³)

South Pars 14,000 500 10,000 360

North Dome 37,000 1300 26,000 900

Total 51,000 1800 36,000 1260

Note: 1 km³ = 1,000,000,000 m³ = 1 Billion m³ = 1 Trillion Liters

However, since the field is a common field and the reservoir is highly homogenous, the ultimate recoverable
reserves of each country may vary from this technical assessment which only considers the static data and does
not include rate of gas migration. So, it is better to say that the ultimate recoverable reserves of each country
would be a factor of cumulative gas production by each of them.[citation needed]

The Iranian section also holds 18 billion barrels (2.9 billion cubic metres) of condensate in place of which some 9
billion barrels (1.4 billion cubic metres) are believed to be recoverable,[16] while Qatari section believed to
contains some 30 billion barrels (4.8×109 m3) of condensate in place and at least some 10 billion barrels
(1.6 billion cubic metres) of recoverable condensate.[17]
The field is rich in liquids and yields approximately 40 barrels (6.4 m3) of condensate per 1 million cubic feet
(28×103 m3) of gas. It has also very high level of well productivity which in average stands for 100 million cubic
feet (2.8×106 m3) per day per well,[18] while the average natural gas well productivity in Iran is 1.5 million cubic
meters per day per well.[19]
Reserve uncertainties
In 2005, QatarEnergy became worried the North Dome's reserves were being developed too quickly, which
could reduce reservoir pressure and possibly damage its long-term production potential. In early 2005, the
government placed a moratorium on additional development projects at the North Dome pending a study of the
field's reservoirs.[20] This assessment is not expected to end until after 2009, meaning new projects are unlikely to
be signed before 2010. However, this did not affect projects approved or underway before the moratorium. [21]

The 2005 moratorium by Qatar and the subsequent extension of that raised some questions about the actual
proven reserves in Qatari side of the field. There was some news in 2006 that ConocoPhillips drilled
unexpectedly dry holes in the North Field and this event was at least a partial catalyst for a revamped
perspective on the North field structure and potential.[22] Further supporting evidence for skepticism about the real
scale of Qatari's reserves came from the 2008 exploration round in Qatar to target exploration of gas in the pre-
Khuff formation. Even one of the blocks is exactly located beneath the North Dome Field. [23]

On 29 October 2007, Qatargas CEO Faisal Al Suwaidi stated that the 5-year moratorium on new North Field gas
development projects, imposed in 2005, could be extended to 2011 or 2012. [20] The exploration moratorium was
lifted by Qatar in April 2017 with the announcement of a new gas project in the southern part of the field.

3. Project Costs and Delivery Markets:

**Project Costs:**

The development of the South Pars/North Dome field demands substantial investments in infrastructure, drilling
technologies, and extraction facilities. Both Iran and Qatar have committed significant financial resources to enhance
production capabilities and develop the necessary infrastructure. The costs associated with drilling wells,
constructing offshore platforms, laying pipelines, and building liquefaction and processing plants constitute a
considerable portion of the overall project expenditure.

The financial commitment extends beyond the initial exploration and development phase to encompass ongoing
maintenance, upgrades, and technological innovations. Collaborative funding mechanisms and investment models
have been established to ensure the continuous development of the field and its infrastructure.

Delivery Markets:

The gas extracted from this colossal field is pivotal for meeting domestic energy demands and exerts a considerable
influence on international gas markets. A comprehensive network of pipelines and liquefied natural gas (LNG)
facilities facilitates the transportation of gas, enabling its delivery to diverse global markets. The primary export
markets include countries in Asia, Europe, and, to a lesser extent, other regions.

The strategic positioning of the South Pars/North Dome field allows for flexible and diverse delivery options.
Pipelines connect the field to neighboring countries, contributing to regional energy security. LNG terminals enable
the conversion of gas into a liquid form for efficient transportation via ships to destinations around the world. The
versatility in delivery mechanisms enhances the field's significance in global energy trade.

4. Strategic Importance:

- Energy Security:The South Pars/North Dome field stands as a bastion of energy security for Iran and Qatar, playing a
pivotal role in meeting domestic needs and ensuring economic stability. The consistent and substantial gas
production from the field contributes significantly to the energy mix of both nations, reducing reliance on alternative
and sometimes less stable sources.
-International Relations: Control and development of this massive gas field hold profound implications for diplomatic
and economic relations between the nations involved, shaping regional dynamics. The collaboration on the South
Pars/North Dome project has not only strengthened bilateral ties but has also positioned Iran and Qatar as key
players in the global energy landscape. The ability to manage and share such a critical resource fosters cooperation
and dialogue.

Global Energy Markets: South Pars/North Dome's significant contribution to global energy markets cannot be
overstated. It acts as a linchpin in the supply of natural gas, exerting influence on prices and market dynamics
worldwide. The field's scale and reliability make it a key player in balancing global energy markets, impacting
negotiations, trade agreements, and geopolitical considerations.

In summation, the South Pars/North Dome gas field emerges as a geological marvel and geopolitical cornerstone,
intricately woven into the fabric of regional and global energy landscapes. Its sheer magnitude and strategic
importance underline its indelible impact on the economic and diplomatic trajectories of the nations that share its
abundant resources. The ongoing collaboration in its management and development reflects a model of international
cooperation in the pursuit of sustainable energy solutions.