Uhde to Build 350,000-Ton Propane Dehydrogenation Plant for National Iranian Petrochemical

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Researched by Industrial Info Resources (Sugar Land, Texas)--Uhde GmbH (Dortmund, Germany), a design and engineering, procurement and construction (EPC) firm, has signed an agreement with the National Iranian Petrochemical Company to build a 350,000-ton-per-year propane dehydrogenation plant at the Imam Khomeini port in Khuzestan province. The $32 million project is expected to be complete in 42 months. The feedstock for the project will come from the Imam Khomeini petrochemical complex. The gas extracts contain large quantities of propane that will be economically and efficiently dehydrogenated at the plant.

Uhde GmbH, a part of ThyssenKrupp AG (FRA:TKA) (Duesseldorf, Germany), has executed more than 2,000 projects in the design and EPC sector. The 80-year-old company, with interests in the industrial, chemicals and refining sectors, has 4,800 employees worldwide. The company is also building an integrated polypropylene and propane dehydrogenation plant near Port Said in Egypt. Construction on the project, commissioned by Egyptian Propylene & Polypropylene Company, is under way and is expected to be complete by the end of 2008 or in early 2009. The 400,000-ton-per-year plant will provide feed for the polypropylene unit of the same capacity. The propane feedstock will be provided by Union Gas Derivative Company, a joint venture between the BG Group (LSE:BG) (Reading, United Kingdom) and ENI S.p.A (NYSE:E) (Rome, Italy). The Egyptian National Gas Company (CAI:NATG) (Cairo, Egypt) will supply the additional feedstock.

Uhde's contract with National Iranian Petochemical is among Iran's recent European agreements. The United States and U.N. Security Council are opposing Iran's uranium enrichment and civilian nuclear program. European companies have stayed away from large-scale investments in Iran's energy sector to protect their interests in the United States. With Iran shifting focus to Asian partners to develop its oil and gas sector, India, China and Russia have made tremendous gains with new project opportunities in Iran. Cognizant of losing out on big deals, European companies are now exploring prospects to develop their business in this oil-rich country, which has the world's second largest deposits of gas and oil.

Recently Switzerland's Elektrizitats-Gesellschaft Laufenburg AG (Zurich, Switzerland) signed a 25-year deal with National Iranian Gas Export Company to deliver 5.5 billion cubic meters of gas per year to Europe. The first supply of gas is expected by 2009. German engineering company SPG Steiner Prematechnik Gastec GmbH (Siegen, Germany) will provide equipment for three gas conversion plants in Iran at a cost of $147 million. ENI, which has invested up to $5 billion on projects in Iran to date, is involved in the Phase II development of the Darkhovin oil field. The company was also involved in Phase I, which increased the output capacity from 50,000 barrels per day (BBL/d) to 100,000 BBL/d. After the current expansion is complete, the project's oil-production output will increase to 160,000 BBL/d.

Polish Oil & Gas Company (Warsaw, Poland) has also signed a preliminary contract with the Iranian Offshore Oil Company to manage the natural condensate and gas reserves. The recent sanctions and opposition by the U.S. has led to companies like Total (NYSE:TOT) (Paris) and Shell (NYSE:RDS.A) (London) to put their investment plans in Iran on hold. Total has invested $4 billion in Iranian projects so far. With political pressure mounting, it looks to be a tight-rope walk for European companies investing in Iran.

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