15.05.2017 TOGY («The Oil and Gas Year») 2016
TOGY talks toAlireza Shirani, managing director of Monenco Iran Consulting Engineers Company, about the company’s hundreds of ongoing projects and how the engineering consultancy market in Iran has evolved. Founded in 1973 and headqartered in Iran, Monenco Iran Consulting Engineers Company is a global provider of engineering and consulting services.
— What is your opinion on the engineering consultancy market in Iran and how it has evolved over the past five to 10 years?
— The total value of engineering consultancy businesses in the world is about UsD 575 billion. Consultancy engineering exports are around USD 75 billion, of which about 80% belongs to European and US companies. This shows this business’great potential.
In Iran, consultancy earns about USD 400 million annually and this number increases if GDP grows by about 5%. In fact, you can’t think about consultancy and construction if your economy is not growing.
The percentage of engineering in EPC projects in Iran is lower than the international norm. About 4% of EPC contracts are usually allocated to consultancy but because of current exchange rates in Iran and its effect on procurement costs, engineering is paid based on purchasing power parity, or PPP, which is usually less than the exchange rates.
Our engineers’salaries are based on PPP, so the amount spent on consultancy is only around 1.5%. Iran comes third, placing after the US and Russia among the countries with reported statistics in the World Economic Forum survey on the number of engineering graduates.
We at Monenco have grown as the market has evolved, and we know there are few companies with this background. It depends on the GDP growth, which has sometimes been negative over the past few years in Iran, meaning that consultancy has decreased. We hope that projects will increase post-sanctions and after the resolution of financial issues.
— What is needed to improve engineering consultancy activitiesin the countries you work in?
— Engineering is related to knowledge, and knowledge isn’t only in books but also comes with experience. To provide good consultancy, you need good graduates who also have experience. In some projects, Iranian companies are very good, but they sometimes need partners to utilise their experience and in return offer access to the Iranian market. This is not just technical expertise transfer, but knowledge per se.
— Which areas are your ongoing projects in?
— Regarding oil and gas developments, we are the only consulting firm to have refinery projects domestically and overseas(in Bangladesh). We have been involved in the Isfahan refinery, for which the implemented extensions are going to be active in the next few years.
We’re also responsible for modelling all of the oil well platforms in the Persian Gulf and sea of Oman. We have used laser scan technology and have modelled all existing platforms with the help of our software experts. This technology can also be used for assessment of existing structures that may be 20 years old and need to be modified and updated.
We are among the few consulting firms who have patents and licences for petrochemical plants, and we are designing a bioethanol plant.
— Could you go into more detail about your main activities in Iran?
— In the oil and gas sector, one project was an order from GDF suez [now Engie] to do a feasibility study on investments in the Middle East. This became the basis for their investment plans in the gas sector.
Regarding downstream projects, the Isfahan refinery expansion is one of the biggest refinery expansion projectsin Iran. This project will double the capacity of the refinery and Monenco is responsible for all the utilities and piping and is the lead designer of the interfacing of all valves. There are both domestic and international contractors involved and we needed to interface them all to get the job done on time and with a high quality.
In petrochemicals, we are responsible for a comprehensive technical and financial feasibility study and business plan for the first GTP (gas to propylene) and GTO (gas to olefin) plants in Iran.
Regarding power generation, Monenco’s plants are generating a total of 50 GW across about 100 plants. In terms of transmission lines, we are responsible for a 765-kV line in Iran – the first at this voltage level in Iran.
In the telecommunications sector, Kusar Yazd has been selected to be the first smart city. Monenco as the national consultant for the project is responsible for its design and also its advanced metering infrastructure, or AMI, system, which is the platform needed for a smart city, enabling energy meters to be used as a portal to send and receive data.
We’re responsible for two more important projects in the Middle East. One is the Iran Iraq powersystem interconnection, for which we are a consultant for the ministries of power of the two countries to create the interconnection. We’re also doing the same thing between the governments of Iran and Oman. The project is using submarine cables to transfer electricity.
— What is Monenco’s strategy for the coming years?
— On ENR’s list of the best engineering consultancy firms in the world, we have placed 144. Our plan is to reach the top 50 in the next five years. We will continue to form partnerships with both Iranian and foreign companies.
Monenco Iran is among the country’s largest companies in consulting, science and engineering, and had about 400 projects ongoing in 2016. MAPNA Group, AMEC and MIR (employee’s share) are its main shareholders. Monenco has completed about 50 overseas projects. It has three registered companies outside Iran, in Germany, Nigeria and Oman.