Iran LNG hopefuls apply to prequalify

08 August 2003
Iran

International and local companies submitted prequalification documents in late July for the Islamic republic's first liquefied natural gas (LNG) train, which is planned to be located near Assaluyeh. Strong interest had already been shown in the project, with most international contractors submitting documents for the plant package before the request for proposals was officially posted (MEED 20:6:03).

Companies seeking prequalifications for the plant package, comprising the LNG train, gas processing units, liquefaction units, offsites and utilities, are understood to include: Japan's JGC Corporationwith France's Technip-Coflexip, Chiyoda Corporation, also of Japan, Italy's Snamprogetti, the UK office of Foster Wheeler, and Hyundai Heavy Industries, DaelimIndustrial Company, Samsung Heavy Industriesand Daewoo Engineering & Construction Company- all of South Korea.

Companies say the contract will be worth about $1,500 million and bid preparation alone will cost about $10 million. Local companies have also applied to prequalify for two other packages covering storage tanks and a harbour and jetties for the export of LNG and liquefied petroleum gas (LPG).

The plant will be located at Tombak, 40 kilometres from Assaluyeh, and will comprise two LNG trains, each with capacity of 4.5 million-5 million tonnes a year (t/y). This tender will only be for the first train. JGC and Technip-Coflexip have prepared the front-end engineering and design (FEED) package. Contractors say they do not expect a tender to be issued until October or November at the earliest.

The client named on the request for prequalification was National Iranian Gas Export Company (NIGEC), a subsidiary of National Iranian Oil Company (NIOC). However, a new project company needs to be formed before a tender can be issued. That still appears to be some way off, despite preliminary agreements between NIGEC, the UK's BGand Italy's Agip.

NIOC is considering four downstream LNG proposals and four parallel bids for the upstream development of South Pars Phase 11, which will supply the feedstock for Iran's first gas export project. Industry sources in Tehran say that Agip and France's Totalhave emerged as frontrunners to sign the contract. However, both companies have linked their bids to the downstream development and marketing of the LNG.

Total's downstream proposals, developed in partnership with Malaysia's Petronas, focus on the Far East. The other proposals include marketing arrangements in India and Europe. Tehran and Delhi are enjoying strong political relations and Iran has pledged to supply India with gas.

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