Kharg NGL raises its head again

24 April 2006

Contractors have been invited to purchase prequalification documents by 26 April for the retendered engineering, procurement, construction, installation and commissioning (EPIC) package on the much-delayed Kharg natural gas liquids (NGL) scheme. The project was originally awarded to a Japanese-led consortium in 2004 at a price of $1,260 million. The client is Iran Offshore Oil Company (IOOC), a subsidiary of National Iranian Oil Company (NIOC - MEED 30:1:06).

Significantly, IOOC has not specified that a foreign/local joint venture must bid for the project, as it has done in the past. The prequalification notice says that the client will award the project to 'an Iranian or an international contractor or a joint venture or consortium of Iranian and international contractors'. The successful bidder will be expected to bring financing.

IOOC is understood to be targeting a contract award by September, with work scheduled to last 40 months. The schedule implies project start-up in early 2010, well after the completion of the olefins complex, which the plant will feed.

The contract will involve the construction of two gas gathering stations and two identical gas processing plants with a total capacity of 600 million cubic feet a day (cf/d) of natural gas. It will also include storage tanks, pipelines and an export jetty.

The response to the prequalification notice will give a clearer indication of international appetite for Iranian energy projects, in the light of heavy workloads elsewhere in the Gulf and Iran's growing political isolation. Several of the original bidders for the contract have already indicated that they will not be participating in the retender.

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