The JGC-led group also includes South Korea's Daewoo Engineering & Constructionand Iran Marine Industries Company (Sadra)and Sazeh Consult, both local. It submitted a price of $1,260 million in late December, the fifth financial bid it had made for the project over a 13-month period. A rival consortium - comprising Japan's Kawasaki Heavy Industries, Sharjah-based Petrofac Internationaland Kayson Groupand Jahanpars, both local - submitted a slightly lower price but had a lower technical ranking. An award on the project was originally scheduled for early last year, but bidding and budgetary problems forced a series of delays.

The project will involve the development of a gas-gathering and NGL plant on Kharg island, including two gas treatment trains each with capacity of 360 million cubic feet a day (cf/d). It will also involve the construction of onshore reception facilities, pipelines and storage and export facilities. The trains will remove acid gas, which is to be reinjected at the Prositive Mauddud field. The onshore works will take 36 months to complete, the offshore work 30 months and the pipelines 24 months.

The total production capacities will be: 262 million cf/d of liquefied petroleum gas (LPG); 2,280 tonnes a day (t/d) of ethane; 2,196 t/d of propane; 1,525 t/d of butane; 2,443 barrels a day (b/d) of pentane; and 4,811 b/d of condensates. Under the feasibility study prepared by the UK's John Brown, the project will deliver an annual turnover of $436 million. The project aims for ethane recovery of 90 per cent and propane recovery of 95 per cent.

The ethane will feed an ethylene cracker at Kharg petrochemical complex now under construction, and the methane will feed a methanol plant at the same complex, for which an EPC contract is to be awarded shortly.

Feedstock will come from five fields in the Gulf including: 150 million cf/d from Foroozan, under development by the local Petro Iran; 13 million cf/d from Soroosh and 38 million cf/d from Nowrooz, both under development by the Royal Dutch/Shell Group; 56 million cf/d from Aboozar; and 40 million cf/d from Bahreganser. Offshore recompression facilities will be developed at Bahreganser and Aboozar and a 26-inch-diameter freeflow pipeline will be laid to Kharg.

The contract will also involve installation of capacity for 60 MW of power, 390 tonnes an hour of steam and 42,000 cubic metres an hour of seawater, fuelled by 74 million cf/d of fuel gas. Storage facilities are to include three cryogenic tanks for LPG, each with capacity of 80,000 cubic metres, one tank for pentane with capacity of 20,000 cubic metres and a 53,000-cubic-metre tank for condensates.

Japan's Mitsui & Companywas awarded the financial mandate late last year, but there are understood to be difficulties in reaching agreement on a final draft, precluding the swift arrangement of financing. The delays are partly due to ambiguities in the contracting process. The earliest possible date for financial close is now the end of 2004.