In the future, this pipeline might be extended to Syria and even to Europe.

Ibrahim TAVAKOLI Managing Director HIRBODAN

Exports to Iraq in the pipeline

January 9, 2018

Ibrahim Tavakoli, managing director of Hirbodan, talks to TOGY about progress on the Iran-Iraq Gas Export Pipeline and the importance of the project, as well as the company’s experience completing projects abroad. Hirbodan provides EPC services to the oil, gas, petrochemicals and power generation industries, among others.

Hirbodan is among the largest EPC companies in Iran and specialises in the building of hydrocarbons, petrochemicals and power generation infrastructure. Its services include consulting, planning, basic and detailed design, materials and equipment procurement, construction, commissioning, operation and maintenance services for various plant and facilities. It also invests in power, oil and gasfield development projects, renewables and utility businesses. Hirbodan was in charge of the whole engineering project cycle management of the Iran-Iraq export pipeline, which involved nine different projects worth USD 2.3 billion.

• On pipeline relevance: “Iran has a large reserve of gas in the southern part of the country [the South Pars field], which is shared with Qatar. This pipeline will allow us to transfer our gas and export it to Iraq. We also have the chance to bring the gas to the western part of Iran, which is important considering that this market is huge and its gas consumption is high.”

• On diversifying: “Hirbodan takes on different types of projects – oil, gas, petrochemical, infrastructure, power plants, everything. For example, after doing one petrochemical project, we start the related pipeline project immediately after. Especially with the collapse of oil prices, there is no option for [contractor] companies to choose which projects that they want to proceed with. In a limited market, you have to be able to cover integrated projects to survive.”

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What is Hirbodan’s scope of work on the Iran-Iraq Gas Export Pipeline and how has the project progressed?
The project was awarded to Hirbodan in [February] 2016. Its investors selected Hirbodan as the company fully in charge of the project management.
Currently, the project is set for commissioning. As for the pipeline, almost 80% of the EPC is complete. The scope of the pipeline works also includes five pressure control stations, five compression stations and one metering station. These stations will be spread across the pipeline network. In this segment of the project, EPC is at about 25% progress.
The initial idea is to export gas to the Iraqi cities of Basra and Baghdad. However, in the future this pipeline might be extended to Syria and even to Europe.

 

How would you define the strategic relevance of this project for Iran?
Iran has a large reserve of gas in the southern part of the country [the South Pars field], which is shared with Qatar. This pipeline will allow us to transfer our gas and export it to Iraq. We also have the chance to bring the gas to the western part of Iran, which is important considering that this market is huge and its gas consumption is high.
So here we have a chance to export gas to Iraq and generate some income out of our vast resources, as well as supplying the national demand in the rest of the country. So this project has a national impact. It is also important considering we are talking about the first gas transmission project to be implemented exclusively under a private-sector investment and based on a BOT [build, operate and transfer] contract.

What are the project’s deadlines, and what has been the biggest challenge so far?
In the coming three months [October-December 2017], we plan to complete the whole pipeline. However, the compression stations will be finalised by September 2018. When we end this part of the project, we will then have a few months for mobilisation of the full project. Thus, I am positive we will succeed in delivering the project in 18 months. This will be a unique record for the local oil and gas industry. It is a very short period of time, considering the complexity of the land where we are developing the project.
In this regard, the project has both geographical and human challenges. The nature of a pipeline project is that you have to pass through everywhere – bridges, highways, mountains, rivers. Thus, the main operational issue, especially considering the deadlines, is the right of way and land acquisition. It is a part of the project that requires a lot of dialogue and professionalism in order to secure the land without any problems with the communities involved. So far, the investor has paid the parties involved more than USD 50 million.

How do you build the capacity to perform integrated EPC projects covering multiple sectors?
We believe that human resources are the most essential and critical aspect of our company. In line with this, most of the company’s programmes are based on the promotion of personnel to get them involved in the different types of projects in which the company is engaged.
Hirbodan takes on different types of projects – oil, gas, petrochemical, infrastructure, power plants, everything. For example, after doing one petrochemical project, we start the related pipeline project immediately after.
Especially with the collapse of oil prices, there is no option for [contractor] companies to choose which projects that they want to proceed with. In a limited market, you have to be able to cover integrated projects to survive.
We aim to have this flexibility in our human resources, especially the engineering department, in order to handle different types of projects. That allows Hirbodan to keep different divisions in engineering and participate in tenders and win projects. This makes Hirbodan very flexible, able to change projects and survive in a very competitive market.

What is Hirbodan’s background in carrying out projects outside of Iran?
Back when Hirbodan started its operations, the approach of management was to work in an international environment. Based on this approach, the company succeeded in venturing to markets outside of Iran, starting with a wind power plant project in Armenia for the generation of 2.64 GW.
Later, in Oman, in a very competitive tender that included Indian, French and US companies, we were awarded a project worth USD 104 million by the Oman Oil Production and Petrochemicals Company. This involved the construction of a power plant and utility unit for the [Mina al Fahal] refinery. Iranian companies sometimes work in supporting markets such as Syria and Iraq, but to be capable of working in Oman, you need to meet all the standards.
We successfully finished that project and for perhaps six years now, the project has been in operation. Furthermore, we have also had a foothold in Iraq since 2012, and we are planning to resume activities there soon. Finally, we have also established a subsidiary in the UAE called HICO and branch offices in Switzerland, Istanbul and Muscat.

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