IOEC Ready for Partnership with Foreigners
Iranian Offshore Engineering and Construction Company (IOEC) is a major Iranian company active in engineering, construction, installation and launch of offshore structures in the Middle East region. Benefiting from an advanced fleet, IOEC has successfully carried out major offshore projects. IOEC is today known as a renowned international company.
IOEC is known for its successful projects in the massive offshore South Pars gas field which Iran shares with Qatar in the Persian Gulf waters.
In order to provide more information about the activities of IOEC, Iran Petroleum has interviewed Gholam-Reza Manouchehri, IOEC managing director.
Q: Phase 12 is one of the major phases of South Pars, which has been recently launched. Would you please tell us about IOEC’s contribution to the operation of this phase?
A: In terms of capacity, Phase 13 equals three conventional phases in South Pars. It has the capacity to produce 3 bcf/d of gas and 120,000 b/d of gas condensate. Along with Phases 6, 7 and 8, it is the largest project in South Pars. The point with Phase 12 is that sweetening operations are done there. Phase 12 does not produce ethane and if needed, an ethane production unit should be included in this project.
The main point with Phase 12 is that it was launched under the conditions of toughest ever sanctions imposed on Iran and domestic manufacturers operated this project. The project was delayed one to two years, but it brought Iran’s petroleum industry major achievements under the aegis of cooperation on the part of Iranian companies involved in refining, drilling and offshore equipment sections.
IOEC laid pipelines in three platforms of Phase 12 of South Pars. To that effect, it laid around 450 kilometers of 32-inch diameter pipes and 450 kilometers of 4-inch diameter pipes. That involved the construction, transportation, installation and launch of three platforms – SVP12 A, SVP12 B and SVP12 C – with a capacity of 3 bcf. A satellite platform was also planned to be constructed in 12C, but it was not assigned to IOEC and no such platform was finally built.
IOEC has also purchased platforms, built offshore pipelines and handled engineering, construction, transport and installation activities as a subcontractor of Petropars Development Company (PEDCO).
This company managed to launch Platform 12A in March 2014 and Platforms 12B and 12C last winter. With a total capacity of 3 bcf of gas, these 3 platforms injected more than 2 bcf of gas into the country’s gas network.
Q: Now let’s talk about IOEC’s plans for Phases 13&14 and 19 of South Pars.
A: In Phase 14 of South Pars, IOEC is tasked with laying pipelines. The required pipes have already been purchased and the project has progressed around 65%. We hope that pipe laying in Phase 14 would finish before the end of the current calendar year and after the end of pipe laying in Phase 19. In Phase 13, IOEC is not a party to the contract, but negotiations have been held for the main contractor of this project so that pipe laying operations of this phase would be assigned to IOEC. A preliminary agreement has already been reached to that effect. After the end of work in Phase 21, Ministry of Petroleum will decide on the priority of Phase 13 or Phase 14. Phase 19 is among major projects whose first phase is to be launched this year. It has three platforms and two 32-inch diameter pipelines, all of which are operated by IOEC. At present, pipeline operations are over and only testing, preparation and startup of joints have yet to be done. Three platforms, under construction in Khorramshahr Yard, are 85% complete. One of these platforms is to be installed and launched in September. We hope that Phase 19 would start producing 1 bcf/d of gas before winter.
Q: Which stage are the operations for the installation of Phases 15&16 of South Pars in?
A: Operations for the installation of platforms in Phases 15&16 had been assigned to IOEC. One platform was assigned to SADRA and another one to ISOICO. The transport and installation of these platforms started before last winter.
Q: What has IOEC done in Phases 17&18 of South Pars?
A: In Phases 17&18, the entire pipe laying operations were assigned to IOEC. These operations included three pipelines connecting the main and onshore platforms and a pipeline connecting the platforms. So far, two 32-inch diameter pipelines have been constructed for carrying gas. Platforms in Phases 17&18 became ready for production last year. Platform 18A was ready for operation last winter. It was launched recently and its gas is used in Phase 16. Platform 17B is also completed and is ready to start operation. Platforms 17B and 18B have been assigned to SADRA, which are currently under construction in Bushehr Yard.
Q: Is IOEC, as an Iranian contractor, worried that its share of petroleum industry projects would decline once sanctions are lifted on Iran, and foreign companies would rush to operate projects in Iran?
A: Naturally, IOEC is worried about its future market, but given Ministry of Petroleum’s planned investment in the upstream sector; some offshore projects will be definitely assigned to us. Given its background of operating projects in India, IOEC is interested in finding a foothold in international markets. That could happen through connections with foreign companies with the objective of contribution to projects overseas. IOEC will be also able to bid for international tenders after the removal of sanctions. Therefore, after the sanctions are lifted, IOEC will eye presence in projects abroad, besides domestic projects.
Q: In case the sanctions are lifted on Iran’s petroleum industry, does IOEC have any plans for partnership with foreign companies?
A: Fortunately, under IPC (Iran Petroleum Contract), an Iranian partner is envisaged in upstream projects. IOEC will have a good chance for benefiting from these contracts. Due to its ability to lay heavy pipelines in Iran, this company will be the preferred one in offshore projects. Such facilities and specialized staff will persuade foreign companies to regard IOEC as partner or a contractor in offshore projects in Iran. We hope that the communications established with some of these companies now would provide good changes for IOEC so that this company would be able to serve other projects after completing its projects at South Pars.
Q: What are the facilities of IOEC in the offshore sector?
A: Work in the offshore sector requires facilities as well as software and hardware potentialities. Fortunately, IOEC is independent with regard to hardware facilities because of its possession of vessels necessary for transportation, installation and pipe laying. IOEC would be able to accomplish its projects with the help of its specialists and staff. At present, all pipe laying and installations in South Pars are done by IOEC and this company has gained valuable experiences over the past 20 years. Regarding access to software required for design, installation and operation of offshore facilities, IOEC is to a large extent familiar with international standards and intends to update itself through further interaction with foreign companies.
Q: Generally speaking, how do you assess Iran’s conditions in manufacturing parts and equipment for the offshore sector?
A: Over recent years, we have witnessed good progress in the manufacturing of equipment for the offshore oil industry and many of items and components purchased from abroad in the past years are now being manufactured domestically. One can say that 80% of the weight of platforms is supplied domestically and they cost us 50% lower than foreign ones. We hope that the share of domestic manufacturing would increase in the coming years.
In the International Oil, Gas, Refining and Petrochemical Exhibition, which was held in Tehran, the potential of Iranian manufacturing companies was effectively clear and companies like IOEC have to support manufacturing companies so that they would boost their capabilities.