August 2011, No. 61

Exclusive 16th International Oil Show

Managing director of Gas Liquefaction Company of Iran announced that about 800 million dollars of bond would be possibly sold to finance a liquefied natural gas project. He added that selling bonds will be possible after approval by the general assembly of the company and completing executive formalities.

Ali Kheirandish stated that the first consignment of the Iranian liquefied natural gas (LNG) will be sold to foreign customers by 2013. He added that, thus far, 2 billion dollars of executive operations have been carried out on this gas project.

Speaking to reporters on the sidelines of the 16th International Exhibition of Oil, Gas, and Petrochemicals, he added that construction of the first Iranian LNG plant has progressed about 44 percent.

He noted that more than 600 million dollars was invested in this gas project last year and 1.6 billion dollars of funds will be provided before the end of the current Iranian calendar year (started March 21, 2011).

The managing director stated that according to the original timetable, the LNG project is expected to progress beyond 55 percent by March 2012. “According to the same schedule, sweetening facilities for the LNG gas plant should be made operational by the same date,” he said.

The official added that ceilings of LPG and LNG tanks have been installed and LNG tanks will become totally operational by next summer.

Kheirandish stated that building storage tanks for the LNG plant has progressed more than 70 percent. As to necessary docks and port equipment, he explained that breakwater and other portal facilities of the gas project have progressed over 70 percent.

He said that construction of a power plant for the LNG plant has progressed 60 percent and three gas-powered turbines have been installed and commissioned.

Kheirandish stated that a total of five gas-powered turbines and two steam production units with a total capacity of producing 800 MW of electricity will be commissioned in fall.

Kheirandish stated that the power plant, utilities, and gas-powered turbo-compressors will be commissioned next spring. “By that time power generation for the LNG plant will amount to over 1,130 MW,” he said.

Iran’s first LNG project costs $4.5 bn

Kheirandish also announced that a total of about 1.4 billion dollars has been invested in the LNG plant in cash and credit and the value of operations carried out thus far has been estimated at 2 billion dollars. “We need 3 billion dollars more in cash and credit to finish the first LNG plant of Iran.”

The official stated that the first LNG plant of Iran will be commissioned at the final cost of 4.5 billion dollars and based on current projections the first consignment of LNG will be ready in the first quarter of 2013 to be delivered to foreign customers.

The managing director also noted that there is no shortage of funds for the project, adding, “Under the present circumstances, one of the most important problems facing construction of the first LNG plant is procurement of certain goods and equipment.”

Referring to the final allocation of 900 million dollars to the project through the Oil Stabilization Fund, the official added that letter of credit for those funds has been signed by the National Iranian Oil Company and that sum of money will be soon appropriated to the project.

Kheirandish concluded by saying that issuing bonds to finance the project would be only possible after approval of the company’s general assembly and completion of administrative and legal formalities.