North and South Pars natural gas fields.

North and South Pars natural gas fields.

The North Field (Qatar) and the South Pars field (Iran)  together form the world's largest nonassociated natural gas accumulation. The term "nonassociated" refers to natural gas not in contact with significant quantities of crude oil in a reservoir.

Most of the field lies about 3,300 meters below the Arabian Gulf in water depths of about 65 meters, and is intersected by the Qatar-Iran border. The field spans 9,700 square kilometers. The Qatari North Field portion covers an area of over 6,000 square kilometers, almost half of the entire surface area of Qatar.

The Qatari North Field contains about 910 trillion cubic feet (Tcf), which accounts for 14% of the 6,337 Tcf of worldwide natural gas reserves. The South Pars field, a geologic extension of the North field, contains an estimated 280 trillion cubic feet (Tcf) of natural gas. Thus, this single accumulation contains about 20% of the world's natural gas reserves. Based on current production capacity, the North field has reserve-production ratio of more than 400 years. However, that expected lifetime will fall given Qatar's aggressive plan to boost production from the field.

The field also contains about 56 billion barrels of natural gas condensate, a low-density mixture of hydrocarbon liquids that are present as gaseous components in the raw natural, and that can condense out raw gas if its temperature is low enough.
An offshore natural gas platform in Qatar's North Field. Credit: Hydrocarbons Technology.
This exceptional natural resource underpins the economies of Qatar and Iran, but in very dissimilar ways. To differing degrees, each nation uses the gas to meet domestic energy needs, to generate revenue through export, to convert gas to liquid fuels, and to produce petrochemicals.

Qatar is a small country (population 840,000), and thus has a modest domestic demand for natural gas. In fact, it consumes less than half of the gas it produces. With a limited demand for domestic consumption, Qatar Petroleum (QP), the state-owned company, and its international business partners have aggressively developed export markets. Most exports are in the form of liquefied natural gas (LNG). Liquefaction of natural gas reduces its volume by about 600 times, thus making it affordable to transport between continents with specially designed tankers.
A LNG tanker.

Qatar is the world's largest producer of (LNG), accounting for about 15% of world liquefaction capacity. If its current LNG expansion plans a realized, by 2010, Qatar will account for one-third of the world's LNG supply. Qatar's natural gas liquefaction facilities and related industries are located in Ras Laffan Industrial City, site of the world's largest LNG export facility. Ras Laffan is a self-contained city built by the government to support the processing and export of natural gas. Over a 24 hour period about 50,000 employees, construction workers, support staff and visitors pass through the RLIC gates, including employees of international energy companies such as ExxonMobil, Shell and Dolphin Energy.

Qatar also is heavily investing in its natural gas pipeline infrastructure. Dolphin Energy's 10 billion dollar Dolphin Gas Project, among the largest energy initiative ever undertaken in the Middle East, will move Qatari natural gas to he United Arab Emirates and Oman, creating a regional energy network for the first time among those three energy rich nations.

Qatar and Pakistan have signed an agreement to construct the Gulf South Asia (GUSA) Gas Pipeline between the two countries. The $2.7 billion pipeline would involve 945 miles of 44-inch diameter pipeline onshore and a 76-mile, 44-inch diameter line offshore. A proposed gas pipeline project between Qatar and Kuwaitis probably not now feasible due Saudi Arabia's refusal to allow the pipeline to pass through its territorial waters.

Iran has a substantial demand for natural gas because its economy is five times that of Qatar's, and its population is more than 80 times is neighbor across the Persian Gulf. In recent years its consumption of gas has met or exceeded domestic production. Twin undersea pipelines carry gas from South Pars to onshore processing facilities at Assaluyeh. There the gas will be processed and prepared for use as a fuel or petrochemical feedstock, to boost the pressure of some mature oil reservoirs, or to be exported by pipelines, and possibly by (LNG) as well.

A natural gas processing facility in the Pars Special Economic Energy Zone (PSEEZ) near Assaluyeh, Iran.

The Pars Special Economic Energy Zone (PSEEZ) was established in October 1998 under the supervision of the National Iranian Oil Company. The purpose of the PSEZ is to provide a complete range of gas processing activities in close proximity to the South Pars field, and to create a favorable economic environment for investment in future infrastructure. The government of Iran has established favorable import/export and tax incentives to encourage investment in the zone.

Iran's ability to boost exports has been hampered by inconsistent economic performance. Iran is still rebuilding its economy that was decimated by eight years of war with Iraq and by the 1979 Islamic Revolution, which halted Iranian gas exports for nearly 10 years. In addition, the U.S. has actively worked to isolate Iran in the Caspian region, and has actively worked to discourage other nations from helping Iran build pipelines or expand its LNG capacity.

A good example of this challenge is the longstanding plan to build a natural gas pipeline to India. Iran and India signed an agreement for an overland natural gas pipeline in 1993, and in 2002 Iran and Pakistan signed an agreement on a feasibility study for such a pipeline. Subsequent India-Pakistan tensions over Kashmir and related security concerns delayed the project. In early 2007 diplomats from all three nations said the deal would completed in the near future. But since then new issues have arisen. Iran wants a higher price than India is willing to pay. Iran wants a "take-or-pay" agreement in which India must pay for the agreed amount of gas even if it does not take delivery of it. On the other hand, India prefers a "supply-or-pay" contract, in which Iran must deliver gas to India or pay for the contracted quantity. At the same time, the U.S. expressed strong concerns about the impact that the pipeline would have on regional security.

Sources

• Aali, Jafar, Hossain Rahimpour-Bonab and Mohammad Reza Kamali, Geochemistry and origin of the world's largest gas field from Persian Gulf, Iran, Journal of Petroleum Science and Engineering, Volume 50, Issues 3-4, 16 March 2006, Pages 161-175.
• Energy Information Administration,World Proved Reserves of Oil and Natural Gas, Most Recent Estimates, Accessed 22 January 2008.
• Javanmardi, J. Kh. Nasrifar, S.H. Najibi and M. Moshfeghian, Feasibility of transporting LNG from South-Pars gas field to potential markets, Applied Thermal Engineering, Volume 26, Issue 16, November 2006, Pages 1812-1819.
• Petropars, South Pars gas field, Accessed 22 January 2008.
• Samii, Bill, Analysis: Iran-Pakistan-India Gas Pipeline Imperiled, Pars Times, Accessed 22 January 2008.
• Simmons Oil Monthly, Qatar, April 24, 2006.