Licence withdrawal hits swing plants

16 September 2005
Two high-density/low-density polyethylene (HDPE/LDPE) swing plants face retendering following the decision by Innovene, the recently acquired petrochemical arm of the UK's BP, to withdraw its technology licensing from the projects just days before bids were due to be submitted. The plants are to be situated in Mahabad and Khorramabad, the capitals of West Azerbaijan and Luristan provinces, and have a proposed capacity of 300,000 tonnes a year (t/y) each (MEED 24:6:05).

Two of the three companies competing for the contract had based their bids on Innovene technology. They were the local Chagaleshin partnership with the UK's SimonCarves, and the local Sazeh Consultin consortium with South Korea's Samsung Engineering Company. The other bidding group was the local Narganwith Italy's Tecnimont.

Bids were originally due on 11 September, although since two of the groups can no longer submit, a retender is now expected.

The client, Bakhtar Petrochemical Company, is working on several projects along the route of the western ethylene pipeline. Apart from the Mahabad and Khorramabad swing plants, Bakhtar is developing a 300,000-t/y LDPE plant at Sanandaj in Kurdistan, an HDPE plant at Kermanshah with the same capacity and a mono-ethylene glycol (MEG) unit at Gachsaran with capacity of 500,000 t/y. Four other projects along the course of the line are also under study.

BP has in recent months sent mixed signals to Iran over its desire to invest in the country. In January, chief executive officer John Browne said 'politically Iran is not a flier', citing sensitivity in the company's large US market. The comments prompted a furious response from Tehran but BP insisted it still wanted to pursue some downstream opportunities in the country and hoped to renew its upstream work in the future. The company was founded as Anglo-Persian Oil Company but became the focus of local anger leading up to its nationalisation in 1951.

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