Iran signed a deal Monday with France’s Total SA and China’s state-run China National Petroleum Corporation (CNPC) to develop the South Pars offshore field, one of the world’s largest natural-gas fields. The $5 billion agreement is the first energy deal between foreign companies and Iran since Tehran signed the landmark nuclear deal with the U.S. and other world powers in July 2015, a move that was followed by the lifting of certain sanctions against the Islamic republic.
The contract, which was signed in Tehran, is for 20 years, and involves 20 wells, two wellhead platforms, and to connect two existing facilities by underwater pipeline. A second phase includes constructing offshore compression facilities. The project’s goals is to process 2 billion cubic feet of natural gas each day, the equivalent of about 400,000 barrels of oil. Total will have 50.1 percent stake in the deal, with CNPC taking 30 percent, and Petropars, a subsidiary of the state-run National Iranian Oil Company, 19.9 percent.
“This is a major agreement for Total, which officially marks our return to Iran to open a new page in the history of our partnership with the country,” Total’s CEO, Patrick Pouyanné, said in a statement Monday. “Total will develop the project in strict compliance with applicable national and international laws.”