Daelim Industrial Co., a major construction firm in South Korea, said on December 29 that it has received a letter of award (LOA) from Iran’s Esfahan Oil Refining Co. (EORC) to improve oil refinery facilities. The deal, which is worth 2.3 trillion won (US$2.0 billion), is the largest contract secured by a domestic construction company in Iran.
The project is to add facilities that will be used to produce high value-added products to the oil refinery in Isfahan, located 400 kilometers south of Tehran, the capital of Iran. Under the deal to be officially signed in January 2017, Daelim Industrial will be in charge of design, equipment and material procurement, construction and financing. Construction will take 48 months after groundbreaking.
Daelim Industrial was the first Korean builder to tap into the Iranian construction market after South Korea and Iran established diplomatic relations in 1962. Beginning with the civil engineering work in Isfahan military facility in May 1975, the company has clinched 26 projects worth US$4.55 billion (5.51 trillion won) in total over the past 40 years in the country. It marks the highest-ever number of construction deals with Iran by a South Korean company. Based on it, Daelim Industrial has won confidence from Iran’s state-run companies and private businesses.
Iran has a rich abundance of natural resources, the world's second largest natural gas reserves and fourth largest oil reserves. Accordingly, it is expected to place orders for various projects to upgrade and repair oil refining, gas and petrochemical plants in the future. Daelim Industrial has had diverse experience in building oil refining, natural gas and petrochemical plants since it has pushed into the Iranian market, so it expects to win additional deals in the future.