October 13, 2009 / 3:34 AM / 10 years ago

UPDATE 1-S.Korea's GS E&C signs $1.4 bln gas deal with Iran

* GS E&C wins 1.6-trln won South Pars gas sweetening project

* Agreement concerns project phase 6-8 (Adds detail)

SEOUL, Oct 13 (Reuters) - South Korea’s GS Engineering & Construction (GS E&C) confirmed on Tuesday it had won a 1.6 trillion won ($1.37 billion) project to sweeten gas from the South Pars field in Iran, increasing its presence in the gas-rich but politically isolated country.

GS E&C (006360.KS) said it and a consortium including Iranian International General Contractor Co had agreed to complete phases 6, 7 and 8 of South Pars gas project with Pars Oil and Gas Co, a subsidiary of Iranian national oil company, by May 2013.

“GS E&C secured a stable base in Iran, the world’s second-largest natural gas reserves, by winning the gas desulfurisation project after it had successfully completed the 9-10 phases of South Pars project,” Moo-ik Chang, vice president of GS E&C said in a statement.

The South Pars reservoir is shared by Iran and Qatar. The Iranian part is divided into 24 phases. The 1.6-trillion won the South Korean firm will receive is equivalent to 77 percent of the total construction, the statement said.

Iranian media reported on Monday that an Iranian state oil and gas firm had signed a contract with a South Korean company referred to as GS to sweeten gas from the South Pars field in the Gulf, but gave no further details. [ID:nDAH251330]

Iran has almost 16 percent of the world’s total gas reserves, but currently has no major net exports partly because U.S. and U.N. sanctions have deterred investment by Western firms with expertise and technology.

It is drawing interest from Indian, Chinese and other Asian firms seen as less susceptible than many other companies to such pressure, but industry experts say it will be many years before Iran becomes a major gas exporter despite its resources.

GS E&C specialises in the construction of oil, gas and petrochemical plants, and power and electrical plants.

GS E&C’s 30.5 percent of stake is held by Chairman Huh Changsu family, who also holds a 46 percent of stake in GS Holdings (078930.KS), according to data from GS Engineering & Construction. GS is the holding firm of GS Caltex, South Korea’s No. 2 crude refiner.

Shares of GS Engineering & Construction dipped 0.48 percent to 103,500 won as of 0154 GMT, outperforming the broader market. .KS11 ($1=1165.9 Won) (Reporting by Shin Jieun and Cho Meeyoung in Seoul; Additional reporting by Reza Derakhshi in Tehran, Editing by Lincoln Feast)

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