China’s Sinopec is in talks with contractors over technical submissions for the development of Iran’s Yadavaran oilfield project, with a contract award expected by the end of June.

The state-run oil firm met with bidders in mid-May, asking for clarification on a number of technical issues and with new documents submitted, contractors are now confident the long-delayed deal will be awarded promptly.

“We submitted the new documents at the end of last week”, says a contractor bidding for the deal. “We expect a decision in June”.

Sinopec approached contractors to prequalify for the engineering, procurement and construction (EPC) deal in December 2009, having issued tenders in February 2009 (MEED 1:12:09).

The UK’s Petrofac completed the front-end engineering and design (Feed) phase of the development in November 2009, and Sinopec launched the EPC bid phase at the end December.

Iran is China’s third largest supplier of crude oil, behind Saudi Arabia and Angola. According to Honolulu based consultants, Facts Global Energy, in 2008 Iran exported 430,000 b/d of crude oil to China.

Sinopec is partnering with National Iranian Oil Company (NIOC) in phase 1 and 2 of Yadavaran, which will produce around 85,000 b/d and 185,000 b/d respectively. It expects the first phase of the deal to be completed in late 2016.

The second-largest Chinese state-run oil and gas firm, agreed in 2004 to take the lead in developing the field as well as committing itself to buying 10 million tonnes of liquefied natural gas (LNG) a year for 25 years.

With the prospects of Iran exporting any LNG in the near future looking remote and US opposition to the deal, progress on the deal was slow. The long awaited Yadavaran deal was only finalised in April 2008. Sinopec owns 51 per cent of the development, NIOC 20 per cent and India’s ONGC Videsh the remaining 29 per cent.

The Yadavaran structure is in the Khouzestan province, close to the Iraqi border. It combines the Kushk and Hosseinieh oilfields, with total oil reserves of 18.3 billion barrels, of which about 3.2 billion barrels are recoverable. Meanwhile the gas reserves are 12.5 trillion cubic feet, with 2.7 trillion recoverable.