Iran and China reached an agreement, based on which, the latter will supply 50 percent of equipment in joint petrochemical projects in Iran, deputy oil minister and managing director of the National Petrochemical Company (NPC) said Sunday, Mehr news agency reported.
Abbas Shari-Moghadam said China has opened a credit line to fund 5 new petrochemical projects, with 20 projects planned to be financed by the Chinese in the future.
Several petrochemical projects due for completion in the Fifth Five-Year Economic Development Plan (2011-2016) have been postponed to the 6th plan (2016-2021). Another 67 contracts with capacity to yield 60 million tons are yet to be completed.
China will fund around 30 percent of such projects, should the two countries reach an agreement.
Deputy director of the NPC Mohammad Hassan Peyvandi also says that Iran will soon sign a deal to purchase methanol-to-olefins (MTO) technology from China.
The technology will allow Iran to increase olefins and propylene production by 15 million tons in the present Iranian calendar year (ending March 2015).
Methanol production capacity is estimated at 5 million tons a year. The volume is expected to increase to 24 million tons within the next five years.
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Iran aims to recover part of its frozen oil revenues from China by letting the Chinese finance petrochemical projects, said the chairman of the board of the Society of Iranian Petroleum Industry Equipment Manufacturers (SIPIEM).
"The government and the oil ministry seem to have no option to recover frozen revenues," Reza Padidar said, adding that turning to Chinese products and equipment is not good news for domestic manufacturers.
"As long as the Chinese undertake Iranian petrochemical projects, domestic contractors will be on the sidelines," Padidar complained.
NPC has yet to discuss the supply of equipment with domestic manufacturers. "If half the equipment of petrochemical complexes is to be imported from China, the NPC should first inform Iranian producers."
He insisted that the ministry should import equipment which domestic firms are unable to manufacture.
The government aims to increase production of petrochemicals to 100 million tons a year worth $40 billion.
