South Pars prices to be opened

11 November 2002

Commercial prices for the onshore development of phases 6-8 on the South Pars gas scheme are set to be opened in late November following the recent conclusion of bid clarification meetings with three international consortia. The estimated $1,200 million engineering, procurement and construction (EPC) contract is the largest of the three to be awarded on the three-phase programme, which is being developed by the local Petropars(MEED 1:11:02; 18:10:02).

Prices for the project to build onshore treatment facilities were initially planned to be opened on 27 October, but the date was pushed back to 25 November to enable final bid clarification talks between Petropars and the bidding consortia. The bidders are: Japan's Toyo Engineering Corporationwith the local Industrial Development & Renovation Organisationand 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 Corporation with the local Al-Azaraband the backing of the Export-Import Bank of Korea.

A Petropars official told MEED on 5 November that the South Korean proposal aims to provide 50 per cent of the financing requirements, while both Japanese groups would raise 100 per cent of the required funding. It is understood that in case of a contract award to the Samsung-led team, Naftiran Intertrade Company (NICO), the Jersey-registered National Iranian Oil Companysubsidiary, will provide additional financing. According to an agreement signed with Petropars in late October, NICO will also provide financing for the project's offshore portion.

The local Sadrahas been given extra time to appoint a subcontractor for the pipeline portion of its $394 million offshore contract to build and install three topsides and to lay three 105-kilometre pipelines. Sadra failed to conclude negotiations with potential partners by the 19 October deadline set by Petropars, but has been given an additional two months to bring on board a subcontractor, which will then need to be approved by Norway's Statoil, the new offshore operator on the scheme (MEED 16:8:02).

Sadra and Paris-based offshore engineering company Doris Engineeringhave already started engineering works on the topside portion of the deal.

Phases 6-8 will produce 80 million cubic metres a day of sour gas, to be reinjected into the onshore Aghajari oil field, and 120,000 barrels a day of condensate, allocated to provide feedstock to the National Petrochemical Company. The project is due to be fully operational by 2006, with first gas deliveries set for 2004.

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