NPC Warns Nonperforming Contractors

NPC Warns Nonperforming ContractorsNPC Warns Nonperforming Contractors

The construction permits of overdue petrochemical contracts will be nullified if contractors further delay their projects, warned the National Petrochemical Company (NPC), Mehr news agency reported.

Several petrochemical projects due for completion in the Fifth Five-Year Economic Development Plan (2011-2016) have been postponed to the 6th plan (2016-2020), with a further 67 unfinished contracts, with a capacity to yield 60 million tons, yet to be completed, said NPC project director Marzieh Shahedani in a press conference.

In the first instance, NPC aims to deliver on 15 projects that are 60 percent completed by March 2016.

Next will be delivery of projects 10-60 percent completed.  These include: Takhte Jamshid Petrochemical Co., the second phase of Kavian Petrochemical Co. the second phase of Karoun Petrochemical Co. and five petrochemicals in Lorestan, Kurdistan, Mahabad, Ilam and Hamedan.

The construction of projects that are 10 percent complete will also ultimately commence.

"We aim to revoke permits for projects that started several years ago and have made little to no progress," she said, and added that unqualified investors will be dismissed.

Unfinished projects need approximately $40 billion of investment with a 60 million tons total production capacity, of which 6 million tons have been allocated to the production of polymer products.

Propylene Priority

Upon the completion of new phases in the South Pars field in the Persian Gulf and the increase of gas production, the establishment of methanol to ethylene, propylene and polyethylene conversion units becomes one of the important goals of the NPC, according to Shahedani.

In the final year of the fifth plan, the NPC expects to increase the production of propylene.

"Over the past two years, we realized that propylene has high added value and we shouldn’t have limited ourselves to the production of ethylene."

Additionally, most of the carbamide manufacturing units are in early stages of construction with Shiraz and Lordegan projects having 63 and 34 percent of progress respectively.

Lordegan unit in Chaharmahal and Bakhtiari Province will be financed by Chinese investors.

On ceasing the operations of laying the central ethane pipeline, she said, "In line with declared privatization policies, the NPC, as a state-owned company, cannot make investments in new petrochemical projects." The pipeline is set to carry ethane from Parsian county in Hormozgan Province to Firuzabad County in Fars Province.

 The project has had a 23 percent progress and a private company will continue to carry out its operations.

P5+1 Negotiations

"We have done proper planning, but should the nuclear talks with the P5+1 fail and the sanctions prevail, we will continue to carry out operations at a slower pace due to the shortage of internal investments," she said, adding that new machinery should be purchased to drive the delayed projects forward.

Criticizing the completion of 3-year projects over a 10-year period, Shahedani stated, "I look forward to improved foreign relations to purchase the machinery and equipments."

The sanctions have been part of the problem, as embargoes were exacerbated over the past two years, but several projects from 2002 to 2006 saw no more than 10 percent progress due to mismanagement."

Around 35 projects whose permissions were issued 10 years ago have approximately progressed by 10 percent. The NPC aims to establish a committee to dismiss incompetent contractors and allocate projects to capable and efficient companies.

Since 2012, the US and EU have imposed additional sanctions on Iranian oil exports and banks.

Iran and the P5+1 - the United States, Britain, France, Germany, Russia and China - are trying to hammer out a long-term nuclear accord that would bring an end to international sanctions that have weakened the Iranian economy.