Locals bid low on Aghajari upgrade

16 December 2005
A consortium led by local firms Chegaleshand Kayson Groupis low bidder at about $830 million for the south fields product optimisation project, which focuses on gas reinjection and output enhancement at the massive Aghajari field. The award of the engineering, procurement and construction (EPC) contract will send a positive message to a sector that has seen little movement in recent months, mired by the run-up to June's presidential election and by the subsequent absence of an oil minister (Oil & Gas, MEED Special Report, 25:11:05, pages 48-50).

Chegalesh and Kayson are supported by the UK's SembCorp Simon-Carvesas the project management consultant (PMC), Germany's Linde, which will carry out the ethane recovery work, and the European office of ABB Lummus Global, which will work on the production units and compressors. Kayson will work mainly on the construction and pipelines part of the package.

The second-placed bidder, the state-owned Iran International Engineering Company (Iritec)in partnership with Petro Pala, a joint venture of the local Darya Palaand Canada's SNC Lavalin, offered a price of about $870 million. The third bidder, at $960 million, was a consortium of Sazeh Consultand Jahanpars, both local, with the UK's Costain Engineering.

The 42-month optimisation scheme aims at reversing field depletion at Aghajari, one of Iran's oldest fields and located in the southwestern province of Khouzestan, by raising production by 300,000 barrels a day (b/d) through the installation of two new production units of 150,000 b/d each, gas reinjection and the revamping of existing production facilities including a natural gas liquids (NGL) plant.

More than 600 kilometres of pipeline will be laid for the project. SNC carried out the front-end engineering and design (FEED).

The client on the scheme, National Iranian Southern Oil Company (NISOC), earlier this year decided to have the project carried out as a single package due to concerns that the larger resources of international contractors were needed. As a result, local companies were given the green light to lead bidding teams with foreigners as subcontractors.

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