Indian Oil Corporation (IOC)has signed a memorandum of understanding (MoU) with National Petrochemical Company (NPC)to develop the olefins 12 project in Assaluyeh - which will be the world's largest cracker. A late October bid deadline has been set for a feasibility study contract from major contractors. NPC has also called for final revised proposals for the Ilam cracker to be submitted by 23 October and for the olefins 8 and olefins 11 crackers early in the same month (MEED 27:8:04).
Contractors say they now expect an engineering, procurement and construction (EPC) contract to be issued by the end of the year, but would like to see more complete feedstock specifications and more technical clarification. The project is highly complex, outstripping in size all existing single-train crackers by several hundred thousand tonnes a year (t/y). The liquid cracker will have capacity of 1.9 million t/y, of which more than half will be fed into the western ethylene pipeline, now under construction, to supply planned ethylene derivative plants along Iran's western border. As well as ethylene, it will also produce 850,000 t/y of propylene, the same amount of fuel gas, 1.2 million t/y of pyrolysis gasoline and 530,000 t/y of C4. The cracker will be fed with 3 million t/y of condensates from South Pars and 2.5 million t/y of heavy ends from the Assaluyeh-based third and fourth aromatics projects. Contractors say different design solutions can be used to build the cracker but few companies will have the ability to carry them out. Teams led by international contractors would have a strong advantage in such a competition. NPC has indicated to engineers that it would allow a two-horse race to emerge for the project because the competition is likely to be so intense. There were four bidders for the 318,000-t/y Ilam cracker: Paris-based Technip, with the local Nargan; the local Petrochemical Industries Design & Engineering Company (Pidec), with Europe's ABB Lummus Global; Germany's Linde, with the local Sazeh Consult; and China's Sinopec, with a European office of Shaw International. The team led by Pidec is understood to be less enthusiastic for the project, while the Sinopec team has already submitted its final proposals. The bidders for the olefins 8 and 11 projects are Technip with Nargan, Linde with Sazeh, the local Namvaran Engineering Consultingwith Shaw International and Pidec with ABB Lummus Global. Namvaran and Pidec are bidding in the same teams that contested the Kharg island methanol project earlier this year. They then submitted prices more than 30 per cent lower than the two foreign-led bidders. Preferred bidders for all three cracker projects are expected to be selected by the end of the year with contracts to be signed by the end of the Iranian year in late March 2005.