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GS Engineering and Construction Company (GS E&C)

South Korea

 

 

LG Engineering and Construction rebranded itself GS Engineering and Construction in 2005 (GS Engineering and Construction Website, accessed June 29, 2010).

Date: September 2000 - Unclear

Deal: According to an industry publication, LG was part of a consortium that received a $400 million contract from the Borzouyeh Petrochemical Company (BPC) for the fourth Aromatics Project in Bandar Assuluyeh. The consortium consisted of Japan's Toyo Engineering Corporation, Iran's Sazeh Consultants, and LG (Hydrocarbon Processing, September 26, 2000). As of September 2005, Iran's Shana reported that the plant was 94 percent complete (Shana, September 25, 2005).

Date: April 2001 – 2002

Deal: According to GS E&C's website, in 2001 LG won a contract from Iran for three separate projects worth $135 million. The first deal was a $55 million acetic acid plant for the National Petrochemical Company of Iran, scheduled to be completed in early 2004 (GS Engineering and Construction Press Release, April 4, 2001). According to GS E&C's website, LG completed its work on the project in December 2002 (GS Engineering and Construction Website, accessed June 29, 2010).

In the second project, LG agreed to build a compressor station worth $52 million for the National Iranian Gas Company, which was scheduled for completion in 2002, according to a company press release (GS Engineering and Construction Press Release, April 4, 2001). According to the company's website, LG completed its work on the compressor in April 2002 (GS Engineering and Construction Website, accessed June 29, 2010).

The third project, according to the press release, was to double the capacity of the Iran Chemical Industries Investment Company's linear alkyl benzene (LAB) plant at a cost of $28 million (GS Engineering and Construction Press Release, April 4, 2001). GS E&C notes on its website that the project was completed in December 2002 2002 (GS Engineering and Construction Website, accessed June 29, 2010).

Date: September 2001 - Unclear

Deal: According to Dow Jones, LG received a $400 million order from the National Petrochemical Company of Iran to build power generation, desalination, and electricity plants in Bandar Assuluyeh. The contract calls for LG to build the plants by May 2004 (Dow Jones Newswires, September 19, 2001).

Date: September 2002 – March 2009

Deal: In September 2002, according to the company's website, LG Engineering & Construction and a pair of Iranian energy firms negotiated an estimated $1.6 billion stake in South Pars gas field phases 9 and 10, a deal expected to produce about one million tons annually of liquefied petroleum gas for export. LG reportedly holds a 42 percent stake in the venture (GS E&C Company Website, September 15, 2002).

According to Pipeline Magazine, the phases were officially launched in March 2009 (Pipeline Magazine, March 16, 2009).

Date: October 2009 – July 2010

Deal: Reuters reported in October 2009 that South Korea's GS Engineering & Construction Company (GS E&C) had announced a $1.37 billion project to sweeten gas from South Pars. "GS E&C 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" (Reuters, October 12, 2009).

Reuters quoted a GS E&C official who commented that the company had successfully completed phases 9 and 10 at South Pars (Reuters, October 12, 2009). According to the GAO, GS E&C signed a $1.6 billion development contract to lead a consortium on the $4 billion project (GAO Report, March 23, 2010).

On July 1, 2010, Reuters reported that GS E&C announced that it had opted to cancel its contract to sweeten gas from South Pars following new sanctions against the Islamic Republic (Reuters, July 1, 2010).

Ties to U.S. Business: In May 2010, the GAO identified GS E&C as one of seven companies that has both commercial activity in the Iranian energy sector and U.S. government contracts. The report noted that the U.S. Department of Defense contracted with the group to construct office buildings on military installations in South Korea (GAO Report, May 12, 2010).