Companies from several countries are eager to resume operations in Iran's petrochemical sector, said deputy oil minister, pointing out to the advantages the industry can offer.
As capital return rates are decreasing and even turning negative in Europe and other countries, Iran's petrochemical industry is a lucrative venture for investors, Abbas Shari-Moqaddam was quoted by Shana news agency as saying. "Even if the industry generates 10 percent return on investment, it will still be profitable for investors."
Free Trade Zones (FTZs) are another advantage for foreign investors in Iran, including 100 percent free repatriation of capital and profit, and 10 years of full tax holidays, the official noted.
Abundance of liquefied feedstock and gas needed for petrochemical projects also makes the country a distinctive target for investment. Iran ranks second in the world in terms of natural gas reserves and third in terms of oil reserves, having 18 and 9 percent of world's oil and gas reserves, respectively.
The Persian Gulf and Gulf of Oman in the south allow for shipping via international sea routes, bringing about economic gain by reducing transportation costs.
Iran has 2,000 kilometers of coastlines of the Sea of Oman and the Persian Gulf, which is one of the most vital transit points in the world.
Young, educated, and experienced workforce, strong presence of design, procurement, construction, and engineering companies, and strategic location and proximity to major markets including Central Asia, India, China, and Iraq, are also advantages Iran offers to foreign investors.
Some 60 incomplete projects have had a progress of 10 to 90 percent, the operation from which will increase petrochemical production capacity to 120 million tons a year, Shari-Moqaddam said. In addition, 36 new projects requiring $41 billion investment would raise annual production capacity to 180 million tons once fully operational.
Of the 60 incomplete projects, four are due for commissioning by yearend (March 21), adding 2 million tons to the country's petrochemical production capacity.
Development of petrochemical sector is to be carried out not only in the current hubs in Bandar Imam and Assalouyeh, but also in four newly-designated locations across the Iranian coastlines, namely Parsian Special Economic Zone, Jask and Chabahar Free Zones on the southern coasts of Iran, and Iranshahr Special Zone in the north.
Currently, 45 petrochemical units produce around 60 million tons of products, accounting for 36 percent of the total non-oil exports. According to global estimates, Iran holds 24 percent of Middle East's and 4.2 of the world's petrochemical production capacity.
According to Shana, Iranian petrochemical output is projected to hit 100 million tons, valued at $20 billion, by 2017. Iran's petrochemical exports mainly include methanol, urea, polyethylene and aromatics.
