BEIRUT, July 12 (Reuters) - Iran is forming a government commission to oversee its deal with Frances Total to develop the South Pars gas field, the first major Western energy investment in the Islamic Republic since the lifting of sanctions last year.
The commission will include representatives from the judiciary, the head of parliaments energy commission and of its planning and budget commission, speaker Ali Larijani said Wednesday, according to state media.
The South Pars project will cost up to $5 billion, including an initial stage of around $2 billion, and production is expected to start within 40 months, the oil ministry said this month.
Total will be the project's operator with a 50.1 percent stake, Chinese state-owned oil and gas company CNPC will hold 30 percent, and National Iranian Oil Co subsidiary Petropars will have 19.9 percent.
Production capacity is seen at 2 billion cubic feet per day, or 400,000 barrels of oil equivalent per day including condensate, Total said in a statement this month.
The gas will supply the Iranian domestic market starting in 2021.
The announcement of a commission followed a parliamentary session on Wednesday where oil minister Bijan Zanganeh spoke to MPs about the details of the project.
Each year of delay in developing South Pars can cost Iran up to $5 billion, Zanganeh told parliament, according to oil ministry news agency SHANA.
He added that Iran has lost some $22 billion because of delays in developing South Pars.
Over the course of 20 years the field is expected to produce 335 billion cubic metres of natural gas as well as 290 million barrels of gas condensate, Zanganeh said, according to SHANA.
The deal with Total increases Iran's energy security and is likely to encourage other foreign companies to invest in Iran, Zanganeh told parliament. (Reporting by Babak Dehghanpisheh; editing by Jason Neely)