The contract was signed on Saturday, March 8, 2025, in tehran in the presence of Iranian President Masoud Pezeshkian and Oil Minister Mohsen Paknejad.
The project aims to offset pressure decline, maintain maximum gas production, reduce gas and gasoline imbalances, and prevent gas migration to Qatar from this shared field.
The contract signing marked the operational launch of the initiative. The agreement was signed by Hamid Bord, CEO of the National Iranian Oil Company (NIOC); Mohammad Owliya, President of MAPNA Group; as well as senior executives from Petropars, Khatam-al Anbiya Construction Headquarters, and Oil Industries’ Engineering and Construction (OIEC Group).
The implementation of this project will not only enhance national energy security but also create 17,000 direct and 50,000 indirect jobs.
According to the plan, the South Pars Gas Field will be divided into seven pressure-boosting hubs. Each hub will require the construction of approximately 60,000 tons of structures, with 70% of the necessary equipment sourced domestically.
The total value of these agreements is approximately $17 billion, with MAPNA Group’s share in the fourth hub of the project amounting to $2.367 billion.
By signing this contract, Iran’s oil and gas industry enters a new phase of sustainable exploitation of the world’s largest gas field, playing a crucial role in ensuring stable gas supply and fostering economic growth.
The final contract was signed between the National Iranian Oil Company (NIOC), as the project owner, and MAPNA Group, Petropars, Khatam-al Anbiya Construction Headquarters, and OIEC.
Iran to End Gas Flaring by 2026: Pezeshkian
Addressing the ceremony, President Pezeshkian acknowledged the efforts of Oil Ministry in ensuring fuel and energy supplies during the winter.
“We apologize to manufacturers for not being able to fully support them during the winter. However, thanks to the efforts made, our people did not face gas shortages. I also appreciate those who participated in the ‘Two Degrees Lower’ campaign to reduce consumption,” he said.
Emphasizing the need to reduce energy consumption, Pezeshkian said, “In just a few months of the 14th administration, we have increased production in crude oil, diesel, and other sectors. However, the challenges we face did not emerge overnight.”
Highlighting ongoing initiatives in energy production, Pezeshkian pointed to significant progress in capturing flared gas, which has long been wasted in Khuzestan. “We have already captured and controlled around 40 million cubic meters of these gases, and by May next year, an additional 40 million cubic meters will be recovered. By early 2026, we will no longer witness the flaring of gas—a practice that wastes energy and causes severe pollution,” he said.
The president also pointed to plans to improve efficiency in diesel, gas, and oil consumption to increase exports to global markets.
He revealed that the government aims to add 30,000 to 40,000 megawatts of wind, thermal, and other electric power sources to the country’s electricity grid, but emphasized that such projects take time and require patience.
Experience of Contractors Like MAPNA is Invaluable: Oil Minister
Addressing the event, Oil Minister Mohsen Paknejad hailed the project as one of the “largest projects in the history of Iran’s oil industry” and a “significant step” toward a new era in the South Pars Gas Field.
Providing details about the contract, he said that the four named companies serve as general contractors.
“The key strength of these contractors is their valuable experience in developing South Pars. They will subcontract parts of the project to private sector firms, ensuring optimal use of domestic capacities,” he stated.
Paknejad acknowledged the efforts of the previous administration, noting that by early 2024, four preliminary contracts worth approximately $400 million had been signed to familiarize contractors with the project. Under the 14th administration, all project contracts—including an IPC for Phase 11 and six fixed-price EPCI contracts for hubs 2 to 7—were finalized and signed, he added.
The minister emphasized that IPC contracts have their own financing mechanisms, but EPCI contracts require further coordination with the National Development Fund, hoping that that this financing would soon be secured.
He also underscored the technological advancements this project will bring, particularly in designing and constructing heavy pressure-boosting platforms weighing between 7,000 and 8,000 tons—a major leap from Iran’s previous experience of building platforms up to 3,000–3,500 tons.
The minister noted that the project involves an estimated 420,000 tons of offshore structures, twice the total amount installed in South Pars over the past two decades.
Additionally, it will include 600 kilometers of subsea pipelines and the domestic production of more than half of the 56 turbo compressors required. In total, 70% of the project’s implementation will be carried out by Iranian companies and suppliers, according to Paknejad.
$22 Billion Investment in Production Capacity Maintenance Projects
Paknejad noted that under the Seventh Development Plan, the country aims to increase raw gas production to 1.34 billion cubic meters per day. Achieving this goal requires both the development of new gas fields and the implementation of production capacity maintenance projects to prevent a decline in output, he said.
According to expert assessments, the total investment needed for development and production capacity maintenance projects is estimated at $75 billion, he said, adding “of this, $53 billion is allocated for developing new gas fields, while the remaining $22 billion will fund capacity maintenance projects, including the South Pars pressure-boosting initiative.”
Paknejad emphasized that reaching the 1.34 billion cubic meters per day production target over the next four years will require an annual investment of approximately $19 billion.
“Securing this level of funding demands precise planning and the optimal utilization of financial resources,” he said.
Addressing the shared nature of the South Pars Gas Field, Paknejad noted that Iran and Qatar have been jointly extracting gas from the field for the past three decades.
Given the natural pressure decline over time, Qatar has already taken steps to enhance pressure by commissioning new platforms and turbo compressors, he said, adding that within the next two years, this pressure-boosting capability will be operational in Qatar.
“This means not only will the pressure in Qatar’s ‘North Dome’ section increase, boosting their production rate, but also, due to the pressure difference, part of Iran’s gas will migrate toward Qatar. This highlights the urgent need for Iran to accelerate its own pressure-boosting project,” Paknejad noted.
$780 Billion Revenue Boost
The minister warned that failure to implement the pressure-boosting project will lead to a significant decline in production. According to projections, starting in 2027 (1406), the field’s output will drop by the equivalent of one South Pars phase annually. By 2029 (1408), the decline will accelerate to 1.5 phases per year, reducing daily production by approximately 42 million cubic meters, said the minister.
Paknejad highlighted that 40% of Iran’s gasoline production is directly linked to South Pars, as the field produces gas condensates alongside natural gas.
These condensates serve as a critical feedstock, particularly for the Persian Gulf Star Refinery, which supplies a major portion of the country’s gasoline, he said, adding, “If the pressure-boosting project is not implemented, Iran’s energy balance—especially in gasoline production—will be severely disrupted.”
He noted that the project includes development of seven hubs each consisting of four platforms—one for power generation, one for accommodation, and two dedicated to turbo compressors.
“Each platform will house four turbo compressors, requiring a total of 56 high-capacity units across the seven hubs,” he said, adding that while the majority of this equipment will be produced domestically, some components will be procured through foreign partnerships and technology transfers.
Paknejad estimated the cost of each hub at approximately $2.5 billion, bringing the total investment for the project to $17 billion.
However, he emphasized that this investment will generate approximately $780 billion in revenue by 2056 (1435). “This is an investment that we cannot afford to delay—not even for a moment,” he stressed.
