February tenders for Pars LNG and South Pars 11

10 February 2006

Major engineering, procurement and construction (EPC) contracts covering Iran's first liquefied natural gas (LNG) project and the associated upstream phase of the South Pars gas field will go to tender in February, according to project sources. Pars LNG, the project company, will issue an invitation to bid for the liquefaction and loading facilities, while Pars Oil & Gas Company (POGC) will issue tenders for the on and offshore elements of the South Pars phase 11 project, which will supply feedstock for the LNG facility (MEED 18:11:05).

The Pars LNG project is expected to involve work totalling $4,000 million. Liquefaction facilities will comprise two trains with a capacity of 4.5 million tonnes a year (t/y) each, in addition to utilities, storage and loading facilities and jetties. South Pars phase 11, which is being carried out on a buyback basis, will produce 1 million cubic feet a day of gas, which will be pumped by pipeline to the site of the liquefaction facilities at Tombuk. The sale of condensates and other products from the field will work the same way as other South Pars buyback contracts. However, the South Pars 11 and Pars LNG facilities will have shared utilities and control rooms to better integrate the project's upstream and midstream elements. The sale and purchase agreement has a lifespan of 25 years. The site has room for another two trains of the same size and there are discussions over the viability of marketing an additional 9 million t/y.

Pars LNG is a consortium of National Iranian Gas Export Company (NIGEC), France's Total and Malaysia's Petronas. The front-end engineering and design (FEED) for the onshore and liquefaction facilities was handled by France's Technip, while the offshore FEED package was carried out by France's Doris Engineering. Project sources say there is 'no problem' with the financing, despite the higher political risk surrounding Iran's nuclear programme.

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