Labal fertiliser tendered

07 October 2005
Bids have been invited for the engineering, procurement and construction (EPC) package on a new urea and ammonia facility planned by Labal Chemical Company, an Iran-India joint venture in Assaluyeh. The new tender comes amid fresh difficulties facing a similar project now under bidding for Shiraz Fertiliser Company (SFC - MEED 15:7:05).

The estimated $500 million Labal project will involve the construction of an ammonia unit with capacity of 800,000 tonnes a year (t/y) and a urea unit with a capacity of 1.1 million t/y. Labal is 55 per cent owned by India's Sab Industriesand 44 per cent by Iranian investors including NPC Internationaland Arak Petrochemical Company, both subsidiaries of National Petrochemical Company (NPC). The consultant is Projects & Development Indiaand a provisional bid deadline has been set for October.

SFC is mulling options on how to go ahead with its planned ammonia/urea project after the 17 September submission of only two bids. It is understood that a third bidder, the local Energy Industries Engineering & Design (EIED), might be permitted to submit a late proposal to avoid a costly retendering. EIED is in partnership with Italy's Snamprogettias the technology provider but has concerns about NPC's insistence that the foreign company should assume joint and several liability for the project.

The other bidders - a consortium comprising Japan's Toyo Engineeringwith the local Petrochemical Industries Design & Engineering Company (PIDEC)and Switzerland's Ammonia Casale, and a team of Kawasaki Heavy Industriesand Tomen Corporation, both of Japan, with the local Narganand South Korea's Hyundai E&C- also have problems with some NPC tender requirements.

Bidders have been asked to price each unit individually as well as a complete package on the two. Each unit is estimated to cost over $200 million. The plant will have capacity of 1.1 million t/y of urea and 670,000 t/y of ammonia.

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