TEC/Chiyoda Consortium were Awarded Contract for Fertilizer Plant Project, Turnkey Project Worth 30 Billion Yen from NPC of IranMay 24, 2001

An international consortium led by Toyo Engineering Corporation (TEC, headquartered in Chiba, President Toshihiko Hirose) with Chiyoda Corporation (headquartered in Yokohama, President Nobuo Seki) and Petrochemical Industries Design and Engineering Company (PIDEC), an Iranian engineering company, with the cooperation of Mitsui & Co., Ltd., have been awarded a fertilizer plant project contract worth about 30 billion Yen from Iran's National Petrochemical Corporation (NPC).

This project is located in the petrochemical complex in the Bandar Assaluyeh region, now being planned by NPC, and it will use natural gas feedstock from the South Pars Gas Field situated off the shore of the Assaluyeh region. The plant will have a capacity of 2,050 t/d of ammonia and 3,250 t/d of urea, making it the largest fertilizer plant project in the world. As a result of the international tender held in February this year, this consortium was formally awarded the contract for the project based on its excellent past performance and the competitive package it offered. The scope of work of the contract includes basic design, detailed design, procurement of equipment and materials, and technical assistance services on a turnkey contract basis. The plant is expected to be on stream by the middle of 2004. It is intended to finance this project with bank loans from the Japan Bank for International Cooperation (JBIC) and Nippon Export and Investment Insurance (NEXI).

After Russia, Iran has the world's second largest deposits of natural gas, and the Iranian government has positioned gas utilization as a top priority project. The South Pars Gas Field off the Persian Gulf coast is Iran's largest offshore gas field, and development work there is now being expedited. In addition to focusing on natural gas as a clean energy source, the Iranian government is planning and implementing numerous petrochemical projects using natural gas. NPC was established in 1964, and it is the second largest petrochemical plant manufacturer in the Middle East. It is planning or building 13 petrochemical complexes utilizing the rich reserves of raw materials available in Iran in a move to develop petrochemical products as a major export industry for Iran.

As a result of the visit to Japan of President Mohammad Khatami in October 2000, economic exchanges between Japan and Iran have again become active, and the Japanese government has started to provide strong support to Japan's private sector through the resumption of medium to long-term trade insurance for Iran-based projects as well as the implementation of a 3 billion dollar loan contract. Thus, it is expected that the Japanese government will also support this project as an extension of this policy.

In June 2000, TEC was awarded a contract to build an aromatics complex in the Assaluyeh region of Iran planned by NPC. Thus, the current project is the second stage in large-scale projects in Iran recently awarded to TEC. Both TEC and Chiyoda have extensive experience in building large-scale plants worldwide, including many in Iran, and this contract recognizes their ability to execute such projects. Recently, there has been an increase in cases of companies in the engineering sector adopting the alliance system for projects in the plant market, a move that enhances mutual strengths. This is the first time that TEC and Chiyoda have been awarded a joint contract for a major overseas project.

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