Linde, Siemens Discuss Iran Petrochem Projects

Linde, Siemens Discuss Iran Petrochem Projects Linde, Siemens Discuss Iran Petrochem Projects

A new round of negotiations has started with the representatives of Germany's major industrial players, including Linde Group and Siemens, in Tehran to provide Iran's unfinished petrochemical projects with much-needed cutting-edge equipment.

Speaking on the sidelines of the 10th International Exhibition of Plastics, Rubber, Machinery and Equipment (Iran Plast 2016), Majid Baten, the head of petrochemical association for international affairs, said, "Fruitful talks were held between the Middle East directors of the German companies and Iran's petrochemical managers. The two sides discussed the details of procuring machinery to complete Iran's petrochemical ventures."

Iran Plast 2016 opened at Tehran's International Permanent Fairground last Wednesday and hosted around 400 domestic and 500 international companies from 25 countries, including Russia, France, China, Turkey, the UAE, Pakistan, South Africa and Australia, with petrochemical heavyweights from Germany, Italy and Austria having reserved the largest pavilions in the exhibition.

Noting that currently 70% of Iran's petrochemical machinery are manufactured by Linde and Siemens, the official noted that recent negotiations revolved around purchase of state-of-the-art equipment, including compressors, computer numerical control machinery and special apparatus, to produce medical products.

On the prospect of selling petrochemical and polymer products to German and Italian enterprises, Baten said, "Among other potential customers, Germany's DBH has called for purchasing 200,000 tons of propylene and polypropylene per annum."

He stressed that the managing director of Germany's Schuler will be in Tehran to negotiate buying polyethylene products in the near future. In addition, serious talks are being held with a German–Italian firm to conclude an agreement to sell polystyrene products.

According to Baten, Schuler has shown interest in buying 500,000 tons of polyethylene products from Iran.

Asked about negotiations with Mexico's Rodolfo Sanchez, Mehdi Sharifi Niknafs, Iran's Petrochemical Commercial Company's chief executive, noted that the directors of the Mexican enterprise have officially called for importing propylene and polypropylene products from Iran and the contract will be signed as soon as the two sides agree on details.

  Reclaiming Lost Markets

"We must reclaim South America's petrochemical market. Nonetheless, high transportation cost of carrying products to target destinations poses a big barrier to expand exports," Niknafs said.

Based on petrochemical macro policies, plans have been made to diversify and expand target markets to sell a wide range of petrochemical materials, which explains why restoring the lost market share in Europe, Africa and South America tops the National Petrochemical Company's priority list.

According to Majid Rezaei, Jam Petrochemical Company's marketing manager, petrochemical exports to Europe will experience a rise in the current Iranian year (started March 20, 2016) as Spain, Bulgaria and Greece have been added to Iran's new customers' list.

Underscoring the production of polymer products in Jam Company like ethylene and butadiene, 1-butene as well as pyrolysis gasoline, the official said, "Ethylene output capacity in Jam complex stands at 1.2 million tons annually. Moreover, 80% of its products are exported to India, China, Turkey and Europe. Bulgaria, Greece, Britain and Spain have also been added to the list of its importers."

  Production, Export Targets

Rezaei noted that plans have been made to set records in Jam Petrochemical Complex not only in export but also in production in 2016.

"The company's current export volume of polyethylene materials to potential markets stands at 450,000 tons per year," he said.

On the company's new plan to diversify its target market in 2016, Rezaei noted that the export volume to China will decrease and more products will be dispatched to Europe, India and Pakistan as they seem to be more lucrative markets and more value-added can be created in this way.

According to reports, the export volume to China has witnessed a 25% decline since last December as more European and Asian customers are willing to import their much-needed petrochemical materials from the Persian Gulf country. Ten major petrochemical projects are poised to go on stream by March 2017, adding around 6.2 million tons to Iran's total petrochemical output capacity of 60 million tons a year.

Hamid Reza Rostami, NPC's director for planning and development, said on Friday that the new units will bring in an additional $2.5 billion in annual petrochemical exports. The new units include the second development phase of Karoun, Pardis, Morvarid and Takht-e-Jamshid petrochemical projects, which will significantly boost the production of petrochemicals such as methanol, urea, ammonia, polystyrene and ethylene glycol.