NISOC to extend Aghajari

21 October 2005
National Iranian Southern Oil Company (NISOC)has asked bidders to extend their bid bond validity by one month and confirm the composition of their bidding groups for the Aghajari gas reinjection programme. Bids were submitted for the project in February, but the client has come under pressure over whether local companies can lead the bidding groups - a question that most industry analysts believe cannot be answered until a new oil minister is appointed (MEED 10:6:05).

The three bidders on the project are: Chagaleshand Kayson Group, both local, with Germany's Lindeand Europe's ABB; Sazeh Consultand Jahanpars, both local; and Canada's SNC Lavalin, which also carried out the front-end engineering and design (FEED), with the local Darya Pala. The groups were originally led by local companies but had been requested to find a foreign project manager because of concerns over their limited experience on such large-scale projects.

The project aims to reverse field depletion and increase production by 300,000 barrels a day by injecting gas newly produced from South Pars. It will involve the installation of more than 600 kilometres of pipeline as well as an ethane recovery plant.

Industry sources say that unless foreign companies can be brought in to lead the bid groups and take on joint and several liability for the Aghajari project, it may have to be retendered or split up into smaller packages. The work is likely to be worth a total of $850 million-1,000 million. President Ahmadinejad is likely to propose a new oil minister by mid-November, which is hoped to accelerate policy decisions.

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