Total SA (NYSE: TOT) has signed on to develop another piece of the world’s largest natural gas field, Iran’s South Pars in the Persian Gulf, as part of a two-phase development, working with CNPC and Petropars.

With a price tag of an estimated $2 billion, the first phase of the project includes plans for 30 wells and two wellhead platforms connected by two subsea pipelines to existing treatment facilities onshore, according to Total, which will serve as operator of the South Pars Phase 11 (SP11) project. The second phase will include construction of offshore compression facilities.

The Paris-based company’s heads of agreement (HOA) with the National Iranian Oil Co. (NIOC), announced Nov. 8, comes as the Middle Eastern country works to renew its energy sector following the lifting of sanctions earlier this year when global leaders reached a deal concerning Iran’s nuclear program. The country is also looking to meet its growing domestic gas needs while also increasing exports.

SP11 is expected to have production capacity of 1.8 billion cubic feet per day, starting in 2020, with produced resources moving into Iran’s gas network.

Total is no stranger to South Pars. The company developed phases 2 and 3 of the field, which partly lies in Qatari territory, before the U.N. imposed sanctions in 2006 that forced it to leave Iran. According to the agreement, project partners will now work to finalize the 20-year deal under terms established by the recently approved Iranian Petroleum Contract, which replaces buybacks, as well as technical and economic terms reached in the HOA.

“Total will develop the project in strict compliance with national and international laws and looks forward to working alongside the Chinese state-owned company CNPC in this additional international partnership,” Total CEO Patrick Pouyanné said in a statement. “This project fits with the group’s strategy of expanding its presence in the Middle East, where the origins of the group lies, and growing its gas portfolio by adding low unit cost, long plateau gas assets.”

Pars Oil and Gas Co., the NIOC subsidiary charged with developing both the South Pars and North Pars gas fields, said the contract is expected to be finalized in early 2017, with SP11 gas production starting within 40 months.

“This would be the first plan from among the South Pars common field plans in which the pressure boosting system is used in order to prevent the reservoir pressure decline,” the company said. “It would subsequently be used as the design pattern for the pressure boosting system in other locations of the common reservoir.”

About 3,700 sq km of the 9,700-sq-km gas field lies in Iranian waters and holds an estimated 14 trillion cubic meters of gas reserves along with 18 billion barrels (bbl) of gas condensates, according to Pars. The field is being developed in 24 phases—about half of which are complete.

The U.S. Energy Information Administration estimates additional phases of the South Pars natural gas field will help boost Iran’s non-crude liquids production by 150,000 bbl/d by year-end 2016 and by another 100,000 bbl/d by year-end 2017.

Iranian news agency Shana reported that SP11 will add 56 million cubic meters of gas to Iran’s gas extraction capacity.

Partners in the Total-led consortium include CNPC, 30%; and Petropars, 19.9%. Total holds the remaining 50.1% interest.

RELATED: Post-Sanctions, Iran Drives Forward With South Pars

Velda Addison can be reached at vaddison@hartenergy.com.

Offshore