TEHRAN Feb 7 South Korea's Daelim Industrial Corp. (000210.KS) signed a deal on Wednesday worth about $320 million to build storage tanks for a liquefied natural gas (LNG) plant in Iran, state media and a source close to the deal said.
The LNG project, which is owned by the state's National Iranian Oil Company (NIOC), is being built near Assalouyeh in southern Iran, and will be supplied with gas from phase 12 of Iran's South Pars field.
Iran has the world's second largest gas reserves but has been slow to develop exports partly, analysts say, because the most common form of technology to cool the gas into liquid form comes from the United States, which imposes sanctions on Iran.
The source, who asked not to be identified, said Daelim would carry out the work with a subsidiary of Khatam al-Anbia, the engineering arm of Iran's Revolutionary Guards.
He said the contract to build storage tanks for LNG and liquefied petroleum gas (LPG) was worth about $320 million, although some state media reports said it was worth more.
He said work would take 42 months.
Ali Kheirandish, the managing director of Iran LNG company which is in charge of the LNG project, was quoted by the official IRNA news agency as saying the plant would produce 10.5 million tonnes a year of LNG when finished in 2010.
The company is sometimes referred to as NIOC LNG.
Analysts say Iran is still at least 10 more years away from becoming a major gas exporter.
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