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Oil and gas offer rich rewards

Iran : Business sectors

Iran is anxious for UK civils firms to invest in its oil and gas sectors and reap the rewards of follow on contracts.

Apatch of desert on the Persian Gulf coast is the site of an expected £67bn investment in the oil and gas sector that Iran cannot tackle on its own.

Investment in the South Pars special economic zone in Assaluyeh on the Persian Gulf coast is being cited as a gateway to the Iranian civil engineering market.

Twenty four phases of development have been confirmed so far but there could be as many as 40 altogether, with up to £33bn to be invested in mainly gas related projects.

Already under construction are six massive gas plants which will each pump in 1Mm 3/d of gas from a huge reservoir jointly owned with Qatar 100km offshore.

Investors are risking billions of pounds under buy-back deals to get these plants up and running. French oil giant TotalFinaElf has put £1.2bn into a gas refinery to produce 2Mm 3of gas a day and will be repaid with around 80,000 barrels a day of gas condensate. The deal is seen as a better guarantee of a return on Total's investment and gets over the difficulties of taking capital out of the country.

It is hoped that the Total gas refinery will be operational by December. The project started in 1997 and and has thrown up challenges ever since for Total's Korean contractor Hyundai and its Iranian subcontractors including Perlit, Gamma, Ramshir, Sab, Solar and Afra.

Ground preparation took a year. Steel and concrete support structures for the four pipelines are now rising quickly using steel pre-fabricated in Korea.

Concrete had to be poured at night. Blocks of ice were added to keep it at 32degreesC to stop settlement or cracking in outside temperatures soaring up to 50degreesC in summer.

All the concrete was tested in an on site laboratory by Iranian concrete specialist TPA.

Concrete construction was made difficult by an acute shortage of on site potable water. A major tanker operation brought it 100km from Dorrahak.

Cement also had to be brought in from as far as Tehran 1,200km away. And the timetable was threatened by the erratic electricity supply and phone lines.

Despite these challenges, TotalFinaElf claims that it is 'more or less' on schedule.

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