Olefins 12 postponed

24 February 2006

The mid-February deadline for the olefins 12 complex at Assaluyeh has been put back indefinitely to give bidders more time to prepare their proposals. The delay is symptomatic of the current state of play in the petrochemicals sector, where difficulties in attracting foreign finance and the changeover in senior management at National Petrochemical Company (NPC) have seen project development slow significantly (MEED 16:12:05). The engineering, procurement and construction (EPC) package on olefins 12, set to be the world's largest standalone unit of its kind, is expected to be worth around $1,000 million. The liquid cracker will have capacity of 1.9 million tonnes a year (t/y). Prospective bidders include Paris-based Technip, Germany's Linde, the UK's Shaw Group and China's Sinopec. Appetite for the project is understood to be high, but tempered by the already heavy workbooks of international contractors.

Several major contracts awarded last year in the sector have still to secure financing. The $934 million EPC package on the olefins 11 cracker is at the engineering stage, but is unlikely to move to procurement until financing can be arranged. The crisis over Iran's nuclear programme, as well as existing high exposure in the country, has put a brake on foreign lending to local projects. The new management team at NPC is understood to be pushing to wrap up outstanding contracts before moving on to tendering its next raft of projects (MEED 18:11:05).

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