Assaluyeh lies on the coast of the Persian Gulf, some 270 km south east of Bushehr. The South Pars gas field, jointly shared by Iran and Qatar, stands 80km to the south of Assaluyeh.
South Pars is geologically an extension of Qatar's 380-Tcf North Field. It was first identified in 1988 and originally appraised at 128 Tcf in the early 1990s. Current estimates are that South Pars contains 280 Tcf or more (some estimates go as high as 500 Tcf) of natural gas, of which a large fraction will be recoverable, besides over 17 billion barrels of liquids.
Development of South Pars is Iran's largest energy project, and already has attracted billions of dollars in investment.
Natural gas from South Pars largely is slated to be shipped north via the planned 56-inch, 300-mile, $500 million, IGAT-3 pipeline (a section of which is now being built by Russian and local contractors), as well as a possible IGAT-4 line. Gas also will be re-injected to boost oil output at the mature Aghajari field (output peaked at 1 million bbl/d in 1974, but has since fallen to 200,000 bbl/d), and possibly the Ahwaz and Mansouri fields (which make up part of the huge Bangestan reservoir in the southwest Khuzestan region). South Pars natural gas also is intended for export, by pipeline and also possibly by liquefied natural gas (LNG) tanker. Sales from South Pars could earn Iran as much as $11 billion per year over 30 years, according to Iran's Oil Ministry.

South Pars gas field will effectively contribute to Iran's economic development.

Development Engine
South Pars gas field, one of the world's richest independent natural gas reserves in Assalouyeh, is the center of great economic developments in the field of gas and petrochemical industries.
Economic experts firmly believe that South Pars gas field will undoubtedly contribute to Iran's economic development.
The field, which straddles the Iranian and Qatari sectors of the Persian Gulf, is the largest gas field in the world and belongs to both countries. It is located 100 kms from the southern Iranian coast.
The field measures 9,700 sq. km., out of which 3,700 sq. km. border Iran's coastline.
The latest survey shows that Iran's share of the gas field stands at 13.14 trillion cubic meters, which accounts for eight percent of the world's and 50 percent of Iran's gas reserves.
Iran's share of South Pars gas field contains a reserve of over 13 billion barrels of gas condensates.

Latest survey shows that Iran's share of the gas field stands at 13.14 trillion cubic meters, which accounts for eight percent of the world's and 50 percent of Iran's gas reserves.

In general, it is composed of 15 phases and its development in line with the five-year economic, social and cultural plan, aims to supply the growing domestic demand for natural gas, transfer it to oil fields to maintain the reserves and export it overseas. These objectives are high on the agenda of the National Iranian Oil Company (NIOC).
Parallel to the development of South Pars gas field, several other petrochemical projects including the ninth and tenth phases of olfin, fourth methanol, fourth aromatic, urea and ammonia have been underway in Assaluyeh and Pars Petrochemical Port.
On September 29, 1997, Total (now TotalFinaElf) signed a $2 billion buy-back deal (along with Russia's Gazprom and Malaysia's Petronas) to explore South Pars and to help develop the field during Phases 2 and 3 of its development. TotalFinaElf has a 40 percent share of the project with the other two companies each having 30 percent shares. NIOC estimates that South Pars has a natural gas production potential of up to 8 billion cubic feet per day (Bcf/d) from four individual reservoirs.
In February 2003, Oil Minister Bijan Namdar Zanganeh officially inaugurated Phases 2 and 3 of South Pars development, which came on stream in September 2002. Already, Phases 2 and 3 reportedly are producing around 2 Bcf per day of natural gas, and 85,000 bbl/d of condensates. Twin undersea pipelines will carry gas from South Pars to onshore facilities at Assaluyeh.

South Pars is Iran's largest energy project, and already has attracted billions of dollars in investment.

In March 2002, Hyundai signed another contract, for $1 billion, to build four natural gas processing trains.

Processing Trains
The Assaluyeh facility comprises four natural gas processing trains, sulphur recovery units, condensate stabilization and storage units, and export compressors.
Phases 4 and 5, estimated to cost $1.9 billion each, are being handled by ENI and Petropars, and involve construction (by Agip and Petropars) of onshore treatment facilities at the port of Bandar Assaluyeh. These two phases are expected to come online by late 2004 or early 2005.
Phases 6-8, which are to produce a combined 3 Bcf/d of natural gas and 120,000 bbl/d of condensate at a cost of $2.6 billion, is being handled by Petropars and Norway's Statoil. They signed an agreement in October 2002. First stages of the project are scheduled to come online in late 2004, with gas being transported via pipeline to the Agha Jari oilfield for injection as part of enhanced oil recovery efforts. NIOC is to take over as operator when development is finished.
Phases 9 and 10 are expected to supply the domestic market, possibly by 2007, while phases 11 and 12 are slated for LNG export and condensate production, possibly by 2008. Companies reportedly interested in all or parts of phases 9-12 (expected to cost $4 billion) include BP, Eni, Petronas, TotalFinaElf, and Statoil.
In September 2002, South Korea's LG signed a $1.6 billion deal with NIOC on phases 9 and 10. LG's share is 42%, and the deal reportedly uses international bank project financing rather than a buy-back model. Meanwhile, Shell hopes to win Phase 13, which will be dedicated to LNG production. Phase 14 is slated for gas-to-liquids (GTL) development, with Statoil and Shell reportedly interested. Phases 13 and 14 could be completed by 2008.
South Pars gas field has been converted into the hub of national development concurrent with creation of several thousand new jobs in the area contributing greatly to reducing the unemployment rate.
According to the Iranian Oil Ministry, an unprecedented amount of $20 billion is to be invested in South Pars gas field development projects.

Phases 9 and 10 are expected to supply the domestic market by 2007.

Cultural Invasion
The rapid pace of industrial development in Assaluyeh region is fast outpacing the socio-cultural progress of the indigenous population. The locals, as it seems, are not ready yet to grasp all the changes brought by billions of dollars and a host of domestic and foreign experts pouring into the region within a short period.
The government continues to neglect this crucial factor and has no plans to educate the native population of the enormous cultural and social transformations that is happening to them. Ground realities in Assaluyeh show these changes are proving a psychological and mental burden for locals whom until a few years ago lived in absolute poverty. They are now forced to coexist with these newcomers, i.e. domestic and foreign laborers, experts and engineers who hail from various cultural, religious and traditional backgrounds.
Before gas was discovered in this remote region, they made their living by fishing. Now, poor-quality and second-hand commodities from countries such as China are all over the place. Iran's industrial pole has also turned into a smuggling haven.
The cultural situation is indeed deplorable. Poor-quality and cheap products such as pirated CDs have overwhelmed the market, exposing the population to an unknown world.
The government needs to move fast and make plans to strike a harmony between industrial development, and cultural as well as social progress in the region.

Shallow Promises
Conditions for the non-local population is no better.
The region lacks the most basic infrastructures to make living the least tolerable for the guests.
There is no adequate transport, lodging, education, medical and health treatment, and recreational facilities. Despite numerous promises by the government to improve the situation, words have yet to be translated into action.
For example, a plan by the Ministry of Housing and Urban Development to provide accommodation for 500,000 residents has been left in limbo, as is the case with other infrastructure and cultural projects.
All the same, the number of strangers is rising fast. They bring with themselves a host of unfamiliar attitudes and behaviors.
Oil minister Bijan Namdar Zanganeh says his ministry's responsibilities do not include fields such as culture-building and social progress.
He admits the government isn't working on cultural and social aspects. "New environmental circumstances could culturally prove a burden on the locals. "
Zanganeh says his ministry will cooperate in any way it can. "We can offer solutions and money."
Things in Assaluyeh are changing fast. For the native people, changes are taking place just too fast.