Iran's petrochemical sector needs more than $50 billion investment in the short run, as plans call for boosting annual petrochemical revenues to $22 billion in the next Iranian year (starts March 20, 2016), Oil Minister Bijan Namdar Zanganeh said in a statement late Saturday.
"Petrochemical revenues stood at around $16 billion a year when the administration [of President Hassan Rouhani] took office [in mid-2013]. Hopefully, we will reach the $18 billion mark" in the present Iranian year, Zanganeh was quoted as saying by IRNA.
"Plans call for raising annual revenues in the petrochemical sector to more than $22 billion next year," he added.
The Islamic Republic wants to become a major player in the global petrochemical industry by raising petrochemical production capacity to 180 million tons a year by 2025 from around 60 million tons at present.
Zanganeh also said around 80% of Iran's petrochemical roadmap have been laid, with feedstock pricing and supply remaining a central issue.
The government last month unveiled a new price-setting formula for natural gas as feedstock for petrochemical units after much delay and speculation.
According to experts, every cubic meter of gas will cost around 8-9 cents under the new scheme, an improvement over the previous 13 cent.
Major international energy companies have kept tabs on Iran's investment opportunities in the petrochemical sector after Tehran and six world powers reached a monumental agreement in July last year on placing time-bound limits on the country's nuclear program in exchange for some sanctions relief.
Foreign investors want feedstock at competitive prices to justify long-term investment in Iran's promising but volatile economy.
The new formula will reportedly take effect in March and will be in place for 10 years, as the government aims to ensure international firms of business security in Iran.
------- Talks With Multinationals
Iran's negotiations with major foreign companies over multibillion deals in petrochemical industry are continuing.
Ahmad Mahdavi, secretary-general of Iran's Association of Petrochemical Industry Corporation, said last week that German, Italian and Spanish firms are at the head of the line in petrochemical negotiations.
Mehr News Agency reported on Sunday that Italian construction and engineering firm Tecnimont Spa has signed a memorandum of understanding worth €1 billion ($1.1 billion) to build new refineries and petrochemical units in Iran.
The deal is the latest sign of growing rapprochement between Iran and Italy as the two countries are fast rebuilding political and economic ties after the end of international sanctions against Tehran last month.
Germans have also been making headlines in the past few months. Oil Ministry officials said last week BASF, the world's largest chemical producer headquartered in Ludwigshafen, is planning to invest $4 billion in a major petrochemical complex that will give it a 60% stake in the joint venture with Iran.
BASF’s planned investment in Iran will involve a guaranteed market and the transfer of technology. It operates six petrochemical sites across the world, with the seventh planned to be established in Iran.
Petrochemical products are Iran's second biggest source of income after crude oil.
According to reports, petrochemical exports reached 16 million tons worth $10 billion last year.
Petrochemical Commercial Company said last month that an undisclosed amount of money was deposited to its account in a Spanish bank as part of the outstanding debt related to Iran's petrochemical exports, marking it the first of such payments in five years.
