1/3 of Petrochem Capacity Untapped

1/3 of Petrochem Capacity Untapped1/3 of Petrochem Capacity Untapped

Iran has capacity to produce 60 million tons of petrochemicals per year. However, the output is estimated at 40 million tons, said Abbas Shari-Moghadam, deputy oil minister and managing director of the National Petrochemical Company (NPC), in an interview with Iran Petroleum magazine, published by ISNA on Tuesday.

"The gap should be filled by supplying feedstock to petrochemical complexes and proper planning," he noted while elaborating on the country's petrochemical industry.

He stressed that boosting international relations and attracting foreign investment would "certainly bring about a bright future" for petrochemical industry.

"Petrochemical industry has faced no restrictions in development over the past few years. Boosting international ties will allow for more investments inside the country. Despite the sanctions, several domestic and international firms have expressed an interest to undertake petrochemical projects."

He stressed that if sanctions were lifted, demand for long-term investments would increase, as investors seek stable pricing of gas feedstock for petrochemical complexes. "We look forward to reaching a long-term investment framework to fund petrochemical projects."

"It is very important for Iran's negotiation with the P5+1 to be fruitful. A lasting opportunity for development will be achieved if a solid, permanent agreement is reached."

The US has imposed tough sanctions on Iran to curb the country's nuclear program, which it claims is geared for to military use. Iran insists its program is peaceful. Iran and P5+1 have been holding a series of talks over the past year to achieve a mutually acceptable,  comprehensive deal.

Referring to the EU's regulations for submission, evaluation and issuance of permission for the export of petrochemicals, he said, "Petrochemicals exporters need to obtain certain permits to operate in the EU. Privately-owned firms can put in their request to obtain permits, or carry out exports via the National Petrochemical Company (NPC)."

Building installations to supply feedstock to new petrochemical complexes in cooperation with private sector investors, addressing the difficulty of petrochemical units in providing feedstock, cooperation with the government and Majlis (the parliament) on pricing feedstock, and funding petrochemical projects are among major responsibilities of the NPC, he noted.

  NPC on the Sidelines

Calling for government support to provide an infrastructure for investment, Shari-Moghadam said, "NPC does not carry out petrochemical projects, but merely provides information and technical services to investors."

The official insisted that NPC would only fund petrochemical projects in less-developed areas, and only if no private investor steps up for investment.

He anticipated that petrochemicals output can increase by 20 million tons under the present circumstances. Over the past year, NPC was concentrated on implementing 15 projects of a total of 62 projects approved to be completed in the Fifth Five-Year Economic Development Plan (2011-2016), he said.

Additionally, NPC introduced 36 new projects, which would increase petrochemicals output by 60 million tons.

Of the 15 projects under development, Lorestan, Takhte Jamshid and Mahabad petrochemical units as well as phase 2 of Kavian petrochemical complex will be completed by the end of the present Iranian calendar year (ending March 2014). Additionally, construction of phase 2 Asaluyeh projects in Bushehr Province is to be financed via the National Development Fund of Iran (NDFI) or undertaken by Chinese investors.