Delays hit Iranian methanol projects

22 July 2010

Schedule slips on two methanol projects at Assaluyeh

Plans to build two methanol plants at Assaluyeh on the south coast of Iran are falling behind schedule after contractors asked for more time to submit bids.

Contractors have already been given an extra month to submit bids for the $350-400m engineering, procurement and construction (EPC) contract for one of the plants, being developed by VenIran Petrochemicals Company (VIPC), an Iran-Venezuela joint venture.

The submission date is 1 August, but it will be extended since information to bidders was delayed

Tehran contractor

VIPC has given the two shortlisted firms until 23 July to submit proposals to develop its plant at Assaluyeh. In May, VIPC shortlisted two local consortiums for the deal: Namvaran and Petrochemical Industries Design & Engineering Company (MEED 28:5:10). The facility is widely seen as a replacement for the Kharg Petrochemical Company’s (KPC) 730,000 tonne-a-year (t/y) methanol project, which was cancelled in 2009.

Local Marjan Petrochemical Company, which is developing the second plant, is expected to announce before the end of July that it is giving contractors another month to work on their bids. “The submission date is 1 August, but it will be extended for a month since information to bidders was delayed from the client side,” says a contractor in Tehran.

Marjan is planning to build a 5,000 tonne-a-day methanol plant at the Assaluyeh Pars Special Economic Zone.

A technology deal was signed with Denmark’s Haldor Topsoe in June 2009 for the facility, which will use natural gas as feedstock. The deal involves the licensing of technology, engineering design, catalysts and technical support services.

Commissioning is scheduled for 2013, with the plant’s 1.6 million t/y output earmarked for export markets, mainly in Asia. Iran plans to become the world’s biggest methanol exporter by 2013, producing 14.7 million t/y.

Delays to petrochemical projects in Iran are nothing new, says Hassan Ahmed, head of research at New York-based consultants Alembic Global Advisors. “Iran had five large-scale ethylene crackers start up since 2005, with an average delay of 18-24 months and average utilisation rates in the first two years of production of 50-60 per cent,” says Ahmed.

A MEED Subscription...

Subscribe or upgrade your current package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications