The project will involve the construction of a methanol unit with capacity of 500,000 tonnes a year (t/y) and an ammonia unit with capacity of 660,000 t/y. Both are scheduled for completion in 2006. The project is being carried out by Petrochemical Industries Development Management Company (Pidmco), a subsidiary of National Petrochemical Company (NPC). The Kharg complex will also include an ethane cracker, with production capacity of 500,000 t/y of ethylene. That plant is now under construction by Paris-based Technip-Coflexip(MEED 28:3:03).

The feedstock, mainly consisting of methane, is to be supplied by the planned natural gas liquids (NGL) facility on Kharg island. However, no award has yet been made on the project, potentially causing delays downstream. Industry sources say they do not expect an imminent award.

The project was first tendered in 2002 as an engineering and procurement (EP) contract. However, a change in NPC bidding policy meant that this and the new Ilam petrochemical complex are the first projects to be tendered for EPC. International contractors are concerned the changes will make bidding harder, with increasingly cut-throat competition.