NPC cancels olefins 11

03 May 2006
The new managing director of National Petrochemical Company (NPC), Asghar Ebrahimi-Asl, has cancelled the Eur 960 million ($1,190 million) olefins 11 project, awarded last year to Germany's Linde, South Korea's Hyundai Engineering & Construction Company and the local Sazeh Consult. Ebrahimi-Asl said that a new contract would be signed with French and local contractors to build three crackers by duplicating the olefins 9 plant, also situated in Assaluyeh (MEED 8:7:05).
'The tender for the olefins 11 project started in 2000 and the contract was finalised in 2005,' said Ebrahimi-Asl at a press conference during Tehran's annual Oil & Gas show in late April. 'I will conclude a new contract, with few rewordings, during one month and save at least Eur 260 million ($322 million) for the country, with 600,000 tonnes more capacity.'

Olefins 11 was to have comprised two units of 1.2 million tonnes a year (t/y) each. It was intended to feed the new western ethylene pipeline transporting feedstock to several new polyolefins plants in the impoverished western provinces.

NPC now wants new capacity of 3 million t/y by duplicating the existing olefins 9 cracker, originally built by Paris-based Technip and the local Nargan, to create three new 1 million-t/y crackers. He said execution of the three new plants would be completed 11 months earlier than under the original olefins 11 plans.

'Technip-Nargan also announced officially that they are free and can do the project with a 20 per cent discount,' said Ebrahimi-Asl. 'For this reason, our decision is definite and we will do this.'

Neither Technip nor Nargan have commented on the NPC head's comments. However, industry sources suggest that while they are interested in building three new plants based on their own technology, they remain concerned about Tehran's current high political risk and the possible contractual terms involving local content and price. Olefins 11's original Eur 960 million price tag was seen by Gulf contractors as highly aggressive.

A MEED Subscription...

Subscribe or upgrade your current package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications