HuaFu to be new Asian partner in Iran LNG

Pressure builds for Iran LNG as US sanctions force it look further afield

Chinese engineering and contracting company HuaFu has been reported by Upstream as the Asian company "partnering" Iran in the development of its primary LNG scheme.

HuaFu Engineering Company confirmed its signing of a contract to undertake construction work on Iran LNG's liquefaction trains when approached by the industry publication, although it refused to divulge any further details.

Iran is finding it hard to get its LNG projects started, as international and unilateral US sanctions, as well as unattractive investment and contract terms, have made IOCs and contractors unwilling to move forward.

"Iran's language when the deal first was announced implied that a partner had been found for the Iran LNG project (hitherto pursued exclusively by Iranian state-owned companies) that could help with technology, marketing, and operation of the plant in exchange for a stake — like Total and Petronas on the Pars LNG project, or Shell and Repsol-YPF on the Persian LNG project," says Samuel Ciszuk of IHS Global Insight.

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"It now seems, however, that the contract signed was with a contractor. Iran lacks the technology to start construction of the liquefaction plant and is on the lookout for potential providers—although HuaFu too lacks experience with the advanced, rare, and highly proprietary technology."

European particpation has stalled, with Germany's Linde formerly chosen as the technology supplier, but will now not go ahead in the current geopolitical climate. "This means HuaFu runs little risk of finding itself breaching international or US sanctions, given that no significant construction can go ahead without a technologically apt supplier or partner coming forward," says Ciszuk.