Financing fixed for South Pars onshore work

10 February 2003
Japanese trading house Mitsui & Companyhas reached an agreement-in-principle to provide financing for the onshore facilities for phases 6-8 of the South Pars gas development scheme. The development is expected to pave the way for a swift award of the engineering, procurement and construction (EPC) contract to build the estimated $1,200 million onshore facilities. A Japanese-led consortium is frontrunner for the project (MEED 10:1:03).

Mitsui in early February finalised the financing agreement-in-principle with the local Petropars, the buy-back developer on the three-phase project, and Jersey-registered Naftiran Intertrade Company (NICO), which in January completed the full acquisition of Petropars. NICO last year agreed to provide financing for the offshore portion of phases 6-8.

Mitsui is expected to begin drawing up a detailed financing plan once the contract for the onshore facilities is formally awarded to the consortium comprising Toyo Engineering Corporationand JGC Corporation, both of Japan, and the local Industrial Development & Renovation Organisation (IDRO). Sources close to the project say the contract award is imminent. The contract is the largest and last to be awarded on the three-phase programme.

The Japanese-led team was the low bidder at just over $1,200 million when prices were opened in late December. The other two consortia bidding for the project are Japan's Chiyoda Corporationwith Athens-based Consolidated Contractors International Company (CCC)and the local Tehran Jenoub, and a consortium including South Korea's Samsung Corporation with the local Al-Azarab.

The onshore treatment facilities will process 80 million cubic metres a day of sour gas, to be reinjected into the onshore Aghajari oil field, and 120,000 barrels a day of condensate, earmarked as feedstock for National Petrochemical Company.

The offshore programme is being developed by Petropars in partnership with Norway's Statoil, which in October acquired a 40 per cent stake in the project's offshore development (MEED 1:11:02).

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