Chinese lead consortium to Arak job

30 June 2006
A Chinese-led consortium is close to signing a $1,500 million contract to upgrade Arak refinery, although financing problems could delay implementation. National Iranian Oil Refining & Distribution Company (NIORDC) is understood to have invited the consortium to negotiate the deal and has approached the Majlis (parliament) energy commission to approve the award (MEED 5:5:06).
The consortium, comprising China's Sinopec Engineering and Oil Design & Construction Company (ODCC) and Sazeh Consult, both local, submitted bids for the Arak refinery project last year. Some of the procurement, originally included in the tender, will now be carried out by NIORDC directly, reducing the size of the engineering, procurement and construction (EPC) contract.

The Arak revamp is part of a much wider upgrade of refining capacity. On the next project, the Isfahan refinery upgrade, the bid deadline has been extended to the end of August, with

bidding open to local contractors with nominated foreign subcontractors.

Four-five groups are expected to submit bids for the estimated $1,500 million scheme, for which the front-end engineering and design (FEED) contract has been carried out by Paris-based Technip. Prospective bidders include Chegalesh, Nargan and Namvaran, all local, Uhde and Lurgi, both of Germany, South Korea's Hyundai Engineering & Construction Company and Sinopec. Bidders can price the work on either an EPC or engineering and procurement basis.

NIORDC is also seeking permission to move forward with the Bandar Abbas condensates project through direct negotiation. Although three consortiums expressed an interest in bidding for the $2,200 million project, none submitted by the 21 June bid deadline.

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