A consortium led by French oil and gas major Total is signing a deal worth an estimated $5 billion with Iran to develop the world’s largest natural gas field.
The deal is the first major energy deal to be sealed by Tehran since the lifting of U.S. sanctions in 2015. Backed by Chinese national oil and gas champion CNPC as well as Total, it illustrates the momentum behind Iran’s rehabilitation into the world economy – and underlines the challenges President Donald Trump faces in stopping that process.
Under the deal, Total, CNPC and Petropars, a state-owned Iranian company, will develop part of the South Pars field, which is shared between Iran and Qatar. The field, which holds an estimated 1,800 trillion cubic feet of gas, lies in the waters of the Persian Gulf between the two countries. Total will have just over 50% of the consortium, while CNPC will hold 30% and Petropars the rest.
Qatar’s part of South Pars (which it calls the North Field) has been the key to the explosion in its wealth over the last two decades, and has been a big factor in the rise of the global market for liquefied natural gas. Iran, meanwhile, has missed out on that windfall, as international sanctions over its nuclear ambitions have cut it off from the necessary technology.
Iran’s ambitions to break into the LNG market still haven’t advanced. The gas from the field will go to Iran’s domestic market, because the partners weren’t able to agree on the commercial terms for an LNG terminal and exports, according to The Wall Street Journal.