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Lack of funds stops Iran’s gas refinery project

Iran Materials 5 May 2012 17:43 (UTC +04:00)

Azerbaijan, Baku, May 5/Trend M. Moezzi

Fifteen months after the National Iranian Gas Company signed a $4 billion contract for two large gas refineries, the lack of funding has stopped the projects.

The National Iranian Gas Company (NIGC) signed the $4 billion financing contract with Bank Saderat in late-January of 2011, Mehr news agency reports.

According to the contract, Bank Saderat would have put up 80 percent of the funding, $3.2 billion, to build the Bid Boland 2 gas refinery and an ethane extraction unit at the Parsian Refinery. The NIGC was to fund the remaining 20 percent, $800 million, of the projects.

The Bid Boland 2 refinery was estimated to cost $3.3 billion and take 44 months to finish. But 15 months later, the lack of funds has completely stopped work on the gas refinery.

Javad Owji, the NIGC's Managing Director, denied that the work on Bid Boland 2 has stopped, saying that it had slowed down a little.

At present, about 200 people are employed by the Bid Boland 2 project. The Bid Boland 2 was projected to produce 57 million cubic meters (mcm) of natural gas and more than 51 million tons of liquid gas to export.

Earlier, Mehdi Jamshidi Dana, the director for coordination and supervision at the National Iranian Gas Company (NIGC) said that funding for Bid Boland 2 had slowed because of a large banking fraud case that involves Bank Saderat.

The $3 billion embezzlement case involves the Amir Mansour Arya Group, which is accused of using its influence and government officials' cooperation to obtain forged letters of credit and huge bank loans that far exceeded its own value.

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