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TEHRAN (Bloomberg) -- Iran is buying equipment to avert a possible disruption in output at its share of the world’s biggest natural gas field, in the event the U.S. decides to impose additional sanctions on its economy, the head of state-run operator Pars Oil & Gas Co. said.
The company is buying “essential equipment” it would need to avert a halt in operations at the offshore South Pars deposit, in case the U.S. imposes new curbs on Iran, Managing Director Mohammad Meshkin Fam said in an interview in Tehran. Under new sanctions, the company’s purchase of a simple valve for the field would become “a most challenging task,” he said.
“They will not be able to stop our work altogether, but they will greatly slow down the progress here at South Pars gas field and make it astronomically more expensive,” Meshkin Fam said Sunday.
U.S. President Donald Trump imposed new economic sanctions on Iran after the country conducted missile tests earlier in the year, and U.S. senators have introduced a bill to further tighten restrictions. Trump campaigned against the 2015 accord that eased curbs on Iran over its nuclear program. South Pars, together with the neighboring North Field in Qatar, is the world’s largest gas deposit, and Iran is seeking to attract foreign investors to help develop it.
Iran signed a preliminary $4.8-billion deal with Total SA and China National Petroleum Corp. in November for the 11th phase of South Pars. It was the country’s first joint venture with international partners since sanctions were eased in January 2016. Total will approve the project if sanctions aren’t modified, CEO Patrick Pouyanne told reporters in February.
The 24 development phases at South Pars have a combined production capacity of 570 MMcmgd, and they currently produce about 500 million, Meshkin Fam said.
His company is seeking $30 billion from the oil ministry to halt a decline in gas pressure at the field, he told a news conference later on Sunday. That would be on top of the $90 billion that the government has allocated to develop South Pars, of which POGC has spent $70 billion.