Kharg cracker awarded

28 March 2003
Paris-based Technip-Coflexipin partnership with the local Nargan Consulting Engineershas been awarded the contract to build an ethane cracker for National Petrochemical Company (NPC)on Kharg island. The Eur 173 million ($184 million) contract marks the third award to Technip-Coflexip for the construction of an ethylene cracker in the Islamic republic in recent years (MEED 28:2:03).

Technip-Coflexip won the engineering and procurement contract for the 500,000-tonne-a-year (t/y) ethane cracker against competition from The Hague office of the US' ABB Lummus Globaland Germany's Linde.

Under the agreement, Technip-Coflexip will supply its own ethylene technology and furnaces for the plant, and carry out basic and detailed engineering. The company will also provide equipment and materials and supervise construction and commissioning, which will be carried out by a local contractor that will be appointed at a later stage. Engineering and procurement will be executed and managed mainly from Technip-Coflexip offices in Paris and The Hague.

The local partner Nargan will provide engineering and procurement services related to the local portion of equipment and materials.

Project financing will be arranged trough a multi-source export credit facility backed by European export credit agencies. It is understood that a lead-arranging bank has still to be appointed.

It is not clear when basic engineering will commence. Under an advanced cash payments system, Technip-Coflexip carried out basic engineering at another cracker project before financial arrangements had been concluded. However, Bank Markazi (central bank) is understood to have expressed legal concerns about the system, which could delay the start-up of basic engineering by several months.

The Kharg cracker and a planned nearby ammonia/methanol complex will receive feedstock from the island's planned gas gathering network, which will have total capacity of about 600 million cubic feet a day (MEED 6:12:02).

Technip-Coflexip and Nargan also have the contracts to build a 300,000-t/y low-density polyethylene (LDPE) unit and a 1 million-t/y ethane cracker at the olefins 9 complex, located in the Pars Special Economic Energy Zone near Bandar Assaluyeh. The team is also building a 1.4 million-t/y cracker at NPC's olefins 10 complex located in the same zone (MEED 25:10:02; 20:9:02).

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