PIDEC, Toyo and Casale bid low for Shiraz

17 March 2006
The local Petrochemical Industries Design & Engineering Company (PIDEC) has submitted the lowest offer at $400 million for the contract to build new ammonia and urea plants at the Shiraz Fertiliser Company (SFC) complex. PIDEC will use an ammonia licence from Switzerland's Ammonia Casale and a urea licence from Japan's Toyo Engineering Corporation (MEED 17:2:05).

Final negotiations on the engineering, procurement and construction (EPC) contract between the client and PIDEC are scheduled to start in early April after the Iranian new year holiday. Construction is due to be completed within 36 months. The urea unit will have capacity of 1.1 million tonnes a year (t/y), while the ammonia plant will have capacity of 670,000 t/y.

The second-ranked bidder was the local Energy Industries Engineering & Design with technology licensed by Italy's Snamprogetti; the third bidder was the local Nargan, with technology from Japan's Kawasaki Heavy Industries.

The tendering process has suffered extensive delays. The project was first put out to bid in late 2004 with technical offers submitted in the first quarter of 2005. However, after quotes came in above budget, a repricing exercise took place.

The project was further delayed after National Petrochemical Company (NPC), which owns SFC, decided to allow local companies to lead the bidding consortia with foreign companies taking subcontracting roles.

Financing could present a major obstacle to the project because of foreign banks' high exposure to the market and the country's perceived higher political risk. So far, the government has not set aside any budget to carry out the project on a cash basis.

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