Iran signs deal with France’s Total

France’s Total and China’s CNPC signed a landmark deal with Iran on Monday to drill into a giant gas field, Iran’s first gas production pact with foreign companies in a decade.

Total and its partners could ultimately spend $5 billion drilling dozens of wells and assembling platforms in a bid to pump 400,000 barrels of oil equivalent a day from the South Pars gas field in the Persian Gulf.

The companies expect to start collecting natural gas in 2021. The contract, which gives Total a 50.1 percent stake in the South Pars field, lasts 20 years. The pact marks “our return to Iran to open a new page in the history of our partnership with the country,” Total chairman and CEO Patrick Pouyanné said in a statement.

“This project is in line with the group’s strategy to expand its presence in the Middle East and grow its gas portfolio by adding low-cost, long-plateau assets,” he said.

Total, like many international energy companies, has a significant presence in Houston. Total’s U.S. oil production unit has its main office in Houston. Earlier this year the company announced plans to invest $1.7 billion in a petrochemical joint venture along the Gulf Coast, which would create 1,500 new jobs, though most are temporary construction jobs.

CNPC will own a 30 percent stake in the Iranian project, and Iran’s Petropars 19.9 percent. Total was considered the front-runner for the project, in part because it was working on South Pars until international sanctions required it to leave Iran.

Iran has the world’s largest gas reserves, according to estimates by British oil major BP. Iran is OPEC’s third-biggest oil producer.

Iran hopes the contract with Total and CNPC could draw other international companies to the oil and gas fields it has been trying to develop over the past 18 months, a potential economic boon for the country after Western powers lifted economic sanctions in January 2016, said Homayoun Falakshahi, an analyst at energy research firm Wood Mackenzie.

The project’s first phase will cost $2 billion as the companies drill 30 wells and build two wellhead platforms and subsea pipelines running to facilities on land.

They’ll build the region’s first offshore compression facilities in a later phase.