Wed May 24, 2017 5:40PM
Iran has signed an agreement with a Spanish-Iranian consortium over the production of corrosion resistant pipes used in the oil industry. (Photo by Shana)
Iran has signed an agreement with a Spanish-Iranian consortium over the production of corrosion resistant pipes used in the oil industry. (Photo by Shana)

The National Iranian Oil Company (NIOC) has signed an agreement with a Spanish-Iranian consortium over the production of corrosion resistant pipes used in the oil industry. 

The agreement was reported by media to be worth $615 million – or €550 million. It was the first major agreement that the country signed after the re-election of President Hassan Rouhani. 

The consortium, which includes Spain's Tubacex S.A. and Iran's Foolad Isfahan Company, will produce pipes made of a corrosion resistant alloy (CRA) for a network of 600 kilometers, or about 370 miles, over three years.

The pipes will be produced using Japan's JFE Steel Corporation technology, and that the know-how will eventually be given to the Iranians, AP reported.

Ali Kardor, the managing director of the National Iranian Oil Company (NIOC), was quoted as saying by the domestic media that the agreement would make Iran the only country to achieve the technology to produce CRA pipes.

Kardor added that several plants would be set up in Iran over the next few years to produce such pipes, IRNA reported.

At a ceremony marking the signing, Iran's Petroleum Minister Bijan Zanganeh said he was "delighted that a deal worth more than €550 million is being signed."

"The Iranian manufacturer is happier than us and perhaps our foreign partner is the happiest party of all today, to have secured itself a long-term market in Iran,” AP quoted Zanganeh as saying.

The minister added that during the years of punitive sanctions over Iran's nuclear program, the industry faced a severe shortage of pipes and were the sanctions still in place, "we would be unable to produce them now."

"I think it is the biggest tender we have had in this industry for a lot of years," said Antonio Rafael, deputy CEO of Tubacex. "It is very professionally managed."