Lavan Development Agreement Signed

Agreement on the development of Lavan gas field, Hormuzgan province has been signed between Iranian Offshore Oil Company (IOOC) and Sepehr Energy Corporation.

The deal was inked by IOOC Managing Director Mahmoud Zirakian-zadeh and the corporation’s Managing Director Gholam Hussein Nejabat, IRNA reported.

Developing gas field, extracting gas and producing gas products as feedstock for downstream petrochemical industry of Lavan are among the project’s objectives.

The project which is estimated to cost $1.1 billion will be implemented in 54 months. Earlier National Iranian Oil Company (NIOC) announced that it has dropped Polish Oil and Gas Company (PGNiG) from Lavan gas field development project, replacing it with a consortium of Iranian companies.

The buy-back contract worth $1.9 billion has been awarded to Sepehr Energy Corporation. After about four years of negotiations between NIOC and PGNiG to sign a contract valued at between $5-$7 billion for the development of Lavan gas field, the Polish company was dropped from the field’s development project due to repeated delays in its performance.

Currently, the early production plan of Lavan gas field with the capacity to produce 7-8 million cubic meters of gas per day is operational and the gas from the field is used as the feed for Reshadat, Parsian and Salman platforms as well as Lavan oil refinery.

Meanwhile, Iranian Oil Minister said Lavan Island will turn into the third major petrochemical hub once the contract for the development of the giant Lavan gas field is concluded.

Rostam Qassemi said the project to develop the huge natural gas reserve should be completed within the next 54 months. The minister expressed optimism that Lavan Island will become a major Iranian petrochemical center once all the projects are completed.

The development project of Lavan gas field will mark a major breakthrough in Iran’s petrochemical sector, he noted.
He added that Iran will sign an agreement with interested parties to develop its oil and gas fields, and the Islamic Republic gives top priority to the development of fields it shares with neighboring countries.

Qassemi further underlined that new conditions in the buyback contracts have provided a suitable climate for investors, reiterating that financial institutions and the private sector will receive guaranteed profits if they invest in upstream oil and gas industries.

Lavan field has 9.5 trillion cubic feet of in-place natural gas, 6.2 trillion cubic meters of extractable gas reserves, and 62 million barrels of condensate. It is expected to produce 750 million cubic feet of natural gas and 11,000 barrels of condensate per day.