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Asian Investors Eye Major Petrochem Venture
Energy

Asian Investors Eye Major Petrochem Venture

As Iran is planning to make a huge profit from its booming petrochemical industry, unnamed Japanese and South Korean financiers have expressed readiness to fund a mega petrochemical initiative in Bandar Imam Petrochemical Complex, acting director of BIPC said on Sunday.
“Plans have been made to develop a new ethylene production unit in BIPC. Moreover, tender documents have been drawn up and the final contract will be signed in the form EPCF, or engineering, procurement, construction and financing,” Mohammad Qoli Younesi was also quoted as saying by Mehr News Agency.
According to the official, serious negotiations are underway with Asian investors to launch a joint development venture.
"A South Korean firm and two Japanese companies have shown interest in handling the financial issues," he said.
Asked about the effect of the rise in crude production on polymer and petrochemical output capacity, Younesi noted that petrochemical production capacity will rise by 6 million tons in the current Iranian year (ending March 2017).
Pointing to BIPC's extensive overhaul in the last three months, the official said, "Production fell drastically due to the overhaul, yet the more feedstock is provided to the complex by the National Iranian Oil Company, the more petrochemical commodities will be manufactured to compensate for the loss."
Stressing that as of last year oil output from the southern oil-rich region has witnessed a significant rise, Younesi noted that BIPC's feedstock, which is mainly liquefied natural gas and gas condensates, including ethane, butane, propane and pentane, has also surged.
Comparing the current amount of LNG delivered to BIPC as feedstock to that of last year, the official said, “Currently, the complex is provided with 105,000 barrels per day whereas last year's feedstock stood at 85,000 bpd.”
Younesi believes that if the much-needed gas feedstock increases on a regular basis, the complex's output will increase by 400,000 tons per annum.
BIPC has the capacity to produce 180,000 tons of petroleum byproducts per year.
   A Major Player
According to Amirhossein Zamaninia, deputy minister for international and commercial affairs, Mitsui Group, one of Japan's largest conglomerates, plans to play a major role in Iran's petrochemical sector.
"Iran needs to invest $80 billion in its petrochemical industry in 10 years and Mitsui will finance some of the country's largest petrochemical projects," he said, adding that petrochemical sector is the second-most valuable industry in Iran, after oil and gas.
The country has a nominal petrochemical production capacity of 60 million tons a year and hopes to foster the industry's growth largely through foreign direct investment.
Iran wants to raise annual production capacity to 180 million tons in a decade. Mitsui's business in Iran dates back to the 1970s. The company was involved in an array of industrial projects while it reportedly purchased crude oil, petroleum products and petrochemicals for sale in Japan. However, international sanctions undermined its trade with Iran.
Iran's nominal production capacity currently stands at 60 million tons a year, but plans call for doubling the volume by 2021 and raising the output to an ambitious 180 million tons a year by 2025.

 

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