Following the qualification announcement of NIOC, Kangan LNG will be submitting the required documents shortly

Following the qualification announcement of NIOC

On January 3, 2017, NIOC (National Iranian Oil Company) made a public announcement regarding the identification process of qualified LNG export projects (or LNG/CNG export projects), who can then enter into a gas sales and purchase agreement (GSPA) with the government for their projects’ feed and fuel gas. The announcement restates the price formula that was announced by the government in September 2016. Furthermore, it highlights some key terms as follows:

  • The GSPAs will be signed before March 20, 2018 (end of next Iranian calendar year) and are for a maximum of 20 years, but extendable subject to mutual agreement.
  • The list of required documents and qualifications of applicants include the following which could identify the serious players:
    • Completed applicants commitment form.
    • Bank guarantee issued by the bank(s) approved by Central Bank of the I.R. Iran (CBI) on the name of NIOC, in line with Iran’s Board of Ministers’ Resolution ref. No. 1234,2/T 50659H dated 13nd Dec 2015, or instead cash deposit, equal to 10 million Euro or its equivalent in Rial to NIOC’s account with details in Appendix No. 5 (converted based on CBI’s exchange rate at the date of issuance of such guarantee or cash deposit).
    • Bank confirmation (approved banks by CBI) of the average annual turnover for the last 3 years of the applicant or major shareholders account equal to at least 50 million Euro or its equivalent in Rial (with CBI’s exchange rate at the date of issuance of such confirmation).
    • Documents indicating the applicant`s or its major shareholder`s executive experience in the last five years in the related fields of oil, gas, refining and petrochemical industry along with relevant supporting documents such as evidence of work, etc.
    • Documents indicating the applicant’s top managers’ capabilities and experiences in management activities as well as technical and managerial capabilities of executive team, who are introduced by applicant for construction and operation of SLNGU.
    • Documents indicating any cooperation with leading and reputable companies within the LNG Industry (service companies, technology owners and equipment suppliers).
    • Providing official consortium agreements in the event that applicant`s request for purchasing natural gas has been provided as a consortium.
    • Market study as well as technical and economic feasibility study for SLNGU, including acceptable executive and financial schedules for different stages of the project.
    • Documents indicating applicant`s activities regarding long term LNG sales agreement/MOU conclusion with reliable customer(s).
    • Applicant`s (or consortium members`) statute as well as the foundation advertisement and the company`s last changes advertisement in the Gazette.
    • Audited annual financial statements of Applicant (or consortium members) in the last 3 years.
  • The qualification process schedule is as follows:
    • Deadline for submission of the applicants’ required documents to NIOC by February 8, 2017;
    • Documents evaluation for determination of the qualified applications and Ministry of Petroleum (MOP) approval of the qualified applicants by February 18, 2017; and
    • Announcement of the qualified and approved applicants by March 8, 2017.