Spanish company Tubacex has signed a contract to supply Iran’s oil industry with corrosion resistant alloy pipes. The deal is worth over €550 million ($615 million), according to Reuters.
The agreement will ultimately result in the construction of 600km of pipe. Tubacex signed the contract with Iran’s Foolad Isfahan company which will take over production of the pipes in three years.
Sanctions placed on Iran had made CRA pipes incredibly difficult to obtain for the country. According to Bijan Zanganeh, who was speaking to SHANA Agency, if an agreement hadn’t been reached between Iran and the west in 2016, which saw sanctions lifted in exchange for Iran cutting back its nuclear programme, the contract with Tubacex would have been impossible.
The agreement is a major contributor to Tubacex reaching a €700 million backlog on its premium products, a company record. According to a press release from the company, Tubacex has boosted sales of high value products and diversified into new markets. The backlog includes a large number of projects in the Middle East, including the Iranian deal. In Europe, much of Tubacex’s business is in Norway and Russia, including a large order with Russian oil company Lukoil. The company has also won significant contracts further afield.
“In Asia, there will be a special focus on the Caspian Sea, where the Tubacex Group has received its largest order to supply umbilical tubes for the Shah Deniz project, one of the world’s largest gas fields; or China, a market in which five orders have been placed recently for new power stations, as well as an important order for Premium tubes for one of the country's main refineries,” says a statement issued by Tubacex.
“Having a backlog worth €700 million for the next three years places us in a highly advantageous position, having met our growth expectations in a segment to which Tubacex is fully committed and that continues to be a key strategic area,” explained Jesús Esmorís, CEO of Tubacex Group. “These are the company’s most technically demanding products and one of the most powerful tools to increase the Group’s turnover and profitability,” he concluded.