Iran’s South Pars Gas Field: Navigating Sanctions and Optimism for Growth

Iran’s South Pars gas field, part of the world’s largest gas field, holds significant energy potential with an estimated 14.2 trillion cubic meters (Tcm) of gas reserves in place, as well as 18 billion barrels of gas condensate. Shared with Qatar’s North Dome field, South Pars has become a focal point for the Iranian government's efforts to overcome sanctions and boost domestic gas production. With increasing optimism surrounding the field's development, the future of South Pars, particularly Phase 11, remains crucial to Iran's energy strategy.

A Legacy of Challenges and Opportunities

Iran's South Pars is a massive, 3,700-square-kilometer reservoir, and Phase 11 is one of its key areas of development. While production has fluctuated due to various factors, including sanctions and operational difficulties, Phase 11 is now seeing rising gas output. According to Touraj Dehghani, CEO of the Pars Oil and Gas Company, production from Phase 11 will reach 28 million cubic meters per day (mcm/d) in the coming weeks. This marks a significant milestone for the country’s energy ambitions.

Optimism surrounding Phase 11’s future is driven by two key factors: collaboration with Qatar and technical support from foreign partners, particularly China and Russia. In 2017, Qatar lifted its moratorium on production from the North Dome, agreeing to more coordinated development efforts with Iran. Despite ongoing tensions, both nations have now re-engaged in talks to improve extraction practices across the shared field. This cooperation is crucial for ensuring the long-term sustainability of both the South Pars and North Dome reserves.

Navigating Sanctions and Technical Challenges

Iran’s energy sector has faced immense challenges due to the re-imposition of sanctions, particularly following the U.S. withdrawal from the Joint Comprehensive Plan of Action (JCPOA) in 2018. These sanctions limited access to crucial foreign expertise, technology, and equipment, causing delays in development and a rush to excavate gas in a less structured way. This rushed approach has negatively impacted the structural integrity of some wells, potentially reducing future output.

However, recent efforts have been made to reverse this trend. In March, Iran’s Petroleum Ministry finalized a US$20 billion plan to construct 28 new platforms aimed at boosting pressure on South Pars. Although initially spearheaded by local companies, technical assistance from Qatar, China, and Russia has been incorporated into the plan. This international collaboration marks a turning point in the field's development, as Iran’s energy sector becomes more reliant on global partners to stabilize and increase production.

The Push Toward LNG and Global Energy Markets

Iran’s long-term goal is to develop a world-scale liquefied natural gas (LNG) export capability, using South Pars as a key gas supply source. In early 2026, Iran plans to start production of 1.5 million metric tonnes per year (mtpy) of LNG at a medium-sized facility in Asaluyeh, built on the site of the original Iran LNG project. This is part of a broader strategy to integrate natural gas from both South Pars and North Pars into a global LNG market that has grown significantly in importance following the geopolitical tensions stemming from the Russia-Ukraine conflict.

Despite setbacks with Western firms, such as Total’s exit from the Phase 11 project in 2018 due to U.S. sanctions, Chinese and Russian companies have continued to play a significant role in Iranian gas development. Notably, Russia’s Gazprom has signed key agreements to assist Iran in completing LNG infrastructure and boosting production from South Pars, offering critical technical support and financing for the projects.

The Road Ahead for South Pars

As Iran and its global partners focus on stabilizing Phase 11 and reaching the original production target of 57 mcm/d, the continued development of South Pars will be crucial for meeting Iran’s energy goals. By working alongside countries like Qatar, China, and Russia, Iran hopes to strengthen its position in the global energy market, despite ongoing political and economic challenges.

Iran’s investment in Phase 11 and other sections of South Pars offers the potential to reshape its energy landscape, providing a much-needed boost to its LNG export ambitions. With global demand for LNG growing and the involvement of key international players, Iran’s gas sector may become a significant contributor to global energy supplies in the years to come.