Iran to scrap $1.2 bln deal with foreign firms

Reuters: Iran will cancel the 960 million euro ($1.19 billion) “Olefins 11” contract signed last year with German industrial gases firm Linde and South Korea’s Hyundai, Iran’s Oil Ministry Web site reported on Monday. TEHRAN (Reuters) – Iran will cancel the 960 million euro ($1.19 billion) “Olefins 11” contract signed last year with German industrial gases firm Linde and South Korea’s Hyundai, Iran’s Oil Ministry Web site reported on Monday.

Under the Olefins 11 contract, the two companies were to build two ethane crackers in the Gulf port of Assaluyeh.

Conservative parliamentarians had argued that Iranian firms could carry out the project more cheaply.

“We are going to cancel the contract of Olefins 11 and we will do it by domestic contractors with a 260 million euro saving,” Asghar Ebrahimi Asl, managing director of the National Iranian Petrochemical Company (NIPIC), was quoted by the Web site as saying.

Sharq newspaper quoted Ebrahimi Asl as saying domestic contractors would be helped by France’s Technip.

“Technip has officially announced it is ready to accomplish the project 20 percent cheaper,” Ebrahimi Asl was quoted as telling the newspaper.

Analysts have previously said a political storm over the “Olefins 11” deal could trigger a flight of engineering companies from Iran, which is trying to boost petrochemical output.

Officials could not immediately be reached for comment.