At $394 million, Sadra submitted the lowest bid for the contract to build and supply three topsides and to lay three 105-kilometre pipelines. Sadra's offer was priced 10-20 per cent lower than the proposals submitted by its competitors.

The other bidders were: the local Persian Gulf Shipping Company; Italy's Saipem, with the local Saff Offshore; and a consortium of the French/Norwegian Stolt Offshoreand a team of Iran Shipbuilding & Offshore Industries Company (ISOICO)and the UK's SLP Engineering.

Industry sources say that Sadra may outsource one of the topsides to ISOICO. On the pipeline portion of the project, Sadra is expected to appoint a subcontractor. It is understood that Sadra has approached several companies, but no agreement has been reached yet.

The contract is the second of three to be awarded on phases 6-8. In June, a partnership of ISOICO and SLP was awarded the estimated $30 million offshore package to supply three jackets.

The only package still open on the three-phase scheme is the estimated $1,200 million onshore contract, covering the construction of treatment and compressor stations. Companies bidding for the package have been given a second deadline extension to submit their final proposals by mid September following the request of all the remaining contenders for more time.

Three consortia are still in the race for the engineering, procurement and construction (EPC) contract following the withdrawal of Sharjah-based Petrofac Internationaland France's Bouygues Offshore. They are: Japan's Toyo Engineering Corporationwith the local Industrial Development & Renovation Organisationwith financing support from Japanese trading house Mitsui & Company; Japan's Chiyoda Corporationwith the local Tehran Jenoub, backed by Mitsubishi Corporation; and South Korea's Samsung Corporationwith the local Al-Azaraband the backing of the Export-Import Bank of Korea.

The developments come amid new indications that Royal Dutch/Shell Grouphas decided to withdraw from the project. Shell acquired a stake in the three phases earlier this year through its takeover of the UK's Enterprise Oil.

'Shell told us that it is not part of the company's policy to participate in a project as minority partner and they have not asked to increase the 20 per cent share Enterprise acquired,' Akbar Torkan, chairman and president of Petropars, told MEED on 13 August. Shell has declined to comment on issues relating to the project.

In view of Shell's anticipated withdrawal, France's TotalFinaElf has emerged as a potential partner for Petropars. Following preliminary negotiations between both companies, the French firm is still in the process of evaluating involvement in the project. 'We have submitted all the relevant documents to TotalFinaElf,' says Torkan. 'But we have not yet had a reply.'

Torkan says that Petropars is continuing its negotiations with Norway's Statoil, which is understood to be interested in acquiring 40 per cent of the project's offshore development, equivalent toa 15-20 per cent stake in the whole scheme.