Kharg NGL saga rumbles on

04 November 2005
Two groups of companies have submitted bids for the engineering, procurement, construction and commissioning (EPCC) contract covering the new natural gas liquids (NGL) project at Kharg. However, it is unclear if the contract will be retendered as contractual conditions stipulate a minimum of three bidders.

The bidders for the estimated $1,500 million contract are: Paris-based Technip, with South Korea's Daewoo Engineering & Constructionand the local Nargan; and the UK's Costain Oil & Gas, with Iran Marine Industries Company (Sadra)and the local Sazeh Consult(MEED 9:9:05).

The contract will involve the development of gas-gathering stations, two identical gas plants, pipelines, liquefied petroleum gas (LPG) storage, seawater intakes and outfalls and an export jetty. The successful contractor will review the front-end engineering and design (FEED) package, which was originally completed by Technip using Shell technology.

Bids were first submitted for the project in late 2002 in a drawn-out tender process eventually won by a consortium headed by Japan's JGC Corporationin early 2004. However, JGC subsequently withdrew from the scheme, prompting the client, Iran Offshore Oil Company (IOOC), to enter into direct negotiations with Technip. These were unsuccessful and the project was retendered in April. However, as a result of only two consortia bidding, it was again put out to tender in June.

A major ethylene cracker, which will use feedstock from the NGL plant, is under construction by Technip and will be completed before feedstock is available from the NGL complex.

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