Role of World’s Largest Gas Field in Iran’s Energy Security

Date: 09 March 2025 - 22:13

News ID: ۱۳۷۷۴۲

TEHRAN - President Masoud Pezeshkian attended the signing ceremony of seven contracts worth $17 billion on Saturday to boost pressure at the South Pars gas field by domestic companies.
The signing opens a new chapter in the Iranian oil industry’s exploitation of the world’s largest gas field, which plays an important role in the sustainable supply of gas and the country’s economic development.
Gas-condensate fields producing under natural depletion are often faced with the challenge of finding long-term solutions to energize the pressure decline in the old gas wells after long years of production.
With a daily production of more than 700 million cubic meters, South Pars provides 75% of Iran’s gas needs, which shows how important it is to the country’s energy security.
However, the field which Iran shares with Qatar has entered the second half of its life cycle, where pressure drops by 7 atmospheres a year, resulting in a yearly decline of 10 billion cubic meters in production.
Hence, the contracts signed on Saturday are a lifeline for the future of Iran’s energy security where 95% of the urban and rural population depends on gas for their livelihoods.
Nonetheless, South Pars is not just about supplying gas. Part of the gas from the offshore reservoir is used as feedstock in Iran’s sprawling petrochemical facilities, including 21 plants with an annual production capacity of 39 million tonnes in the nearby town of Assaluyeh.
Petrochemical industry is one of the cornerstones of Iran’s economy, which has a significant impact on increasing national wealth and plays a vital role in creating direct and indirect jobs.
With petrochemicals also included in U.S. sanctions, Russia is a key destination of Iran’s petrochemical exports which, according to officials, are expected to rise to 34 million tonnes in 2025 from 30 million tonnes a year before and bring about $25 billion in revenue.
Petrochemical production, according to official projections, will climb to about 83 million tonnes from about 75 million tonnes in the previous year, indicating how it is important to maintain gas production.
For years, the plan to maintain pressure at South Pars gas wells had been in the works, but Iran’s efforts to bring in foreign companies and their investments to do the job had hit the rocks because of sanctions.
According to Minister of Petroleum Mohsen Paknejad, the South Pars pressure boosting plan is more essential than daily bread and butter; the plan includes seven hubs, each requiring about $2.5 billion to build.
Four Iranian energy companies, namely Petropars, Khatam-al Anbiya Construction Headquarters, OIEC Group and MAPNA, were awarded as general contractors of the mega-project, turning another corner in Iran’s oil industry which for long relied on foreign companies for development and maintenance.
Today, the South Pars Gas Complex is part of a resilient economy, which is able to rely on domestic power, local knowledge, and the use of parts and equipment supplied by Iranian manufacturers and knowledge-based companies to move on the path of development, progress and growth.
So far, the reservoir has generated some $450 billion of wealth which has had its most significant impact on the flourishing of petrochemical industry, boosting gasoline production, increasing job opportunities, improving the environment, and stabilizing the country’s energy supply.
The consistent and continuous progress in various development phases of South Pars has vaulted Iran to great power status among the global gas giants and diversified its export portfolio.
In other words, Iran’s remarkable progress in the development of South Pars has not only strengthened its industrial infrastructure, but has also increased the capabilities of Iranian companies and their participation in international projects.
Currently, Iran produces over one billion cubic meters per day of natural gas, which is equivalent to approximately 6 million barrels of crude oil. This means South Pars alone provides Iran with the equivalent of 4.5 million barrels of crude oil a day.
If this is put in the perspective of the country’s refining and crude oil production capacities, the serious challenges which Iran would have faced in terms of energy security without the development of South Pars become clear.
The reservoir also plays a significant role in the country’s gasoline supply and energy self-sufficiency, providing some 600,000 barrels a day of gas condensate for the Persian Gulf Star Refinery which produces 40 percent of the gasoline consumed in the country.
Also, from an environmental perspective, gas consumption is less polluting than petroleum products. Therefor e, the development of South Pars is vital to significantly reducing environmental pollution.
In short, the South Pars gas complex plays a leading role in the national economy and is key to Iran’s strategic goal of taking advantage of its geographic position to become an energy hub.