LNG tender imminent

12 December 2003
National Iranian Gas Export Company (NIGEC)and the UK's BGare preparing to issue a tender in the second half of December for the first packages on a liquefied natural gas (LNG) train. BG has declined to comment on reports that it has already signed a provisional offtake agreement with NIGEC for 5 million tonnes a year (t/y) of LNG, but says that negotiations are progressing well (MEED 24:10:03).

The UK company has been negotiating for a 50 per cent stake in the project and the sole offtaker for the entire ouput of the first train. The proposed capacity of the train is 4 million-5 million t/y and NIGEC has said it wants to build a second train of similar size.

Potential bidders say they only expect to receive partially-completed tender documents because the front-end engineering and design (FEED) package, being carried out by France's Technipand Japan's JGC Corporation, will not be completed until early next year. They say the provisional documents will be issued anyway because it is politically important to get the tender process under way by the end of 2003.

The engineering, procurement and construction (EPC) documents are expected to be issued in three packages, comprising the main plant and gas processing units, storage facilities and the export terminal and jetties. Companies that applied to prequalify for the project include: JGC and Technip, Japan's Chiyoda Corporation, Italy's Snamprogetti, the UK office of Foster Wheeler, and Hyundai Heavy Industries, Samsung Heavy Industries, DaelimIndustrial Companyand Daewoo Engineering & Construction, all of South Korea.

Feedstock for the project was originally planned to come from South Pars phase 11, which is still under tender a year after bids were first submitted. France's Totalhas long been reported to be frontrunner for the project. However, NIGEC told MEED in September that gas could come from any of the existing South Pars phases if no agreement was reached on phase 11.

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