Royal Dutch Shell Plc is considering investment in Iran's emerging petroleum industry, notably funding and constructing a gas-to-liquids (GTL) plant, a deputy oil minister said.
"There is the possibility of cooperation with Shell to develop GTL infrastructure in Iran," said Amirhossein Zamaninia, deputy oil minister for international affairs, Mehr News Agency reported on Monday.
According to Zamaninia, investment in oil and gas exploration and production projects, boosting the rate of recovery at operational fields and joint ventures in the petrochemical sector are front and center in negotiations with the Anglo-Dutch major.
"Shell is currently studying the Iranian market and is expected to propose a framework for investment in the petrochemical industry soon," Zamaninia added.
GTL is a process that converts natural gas into liquid fuels such as gasoline, jet fuel, and diesel. The technology will allow Iran to produce high-quality liquid fuels that are usually made from crude oil.
According to the US Energy Information Association, five GTL plants were in operation globally by 2014, including two in Malaysia and one in Qatar that were operated by Shell.
Iran plans to develop its petrochemical industry by making better use of its massive hydrocarbon deposits. It sits on an estimated 34 trillion cubic meters of natural gas reserves, or around 18% of the total global gas reserves.
Last month, Shell signed a memorandum of understanding with the state-run National Petrochemical Company on expanding cooperation in the key petrochemical industry. But officials say the two sides need time to thrash out the details of cooperation.
Shell, which was forced by sanctions to cease trade with Iran in 2010, resumed purchase of Iranian oil in June. The company also paid €1.77 billion ($2 billion) it owed the National Iranian Oil Company in March, settling debts after the sanctions removal in mid-January.
Iran's petrochemical production capacity is around 65 million tons a year. Tehran hopes to boost the capacity to 130 million tons a year by 2020 before reaching its lofty goal of 180 million tons per annum by 2025.
Foreign businesses have rushed to cash in on last year's historic accord between Iran and world powers that saw sanctions lifted in exchange for curbs on Tehran's nuclear program.
Hans Nijkamp, vice president of Shell's Upstream International, Middle East and North Africa department, told the AFP in October, "We first need to see the areas where we think we can work together, and then work out what commercial structures we use … But it is too early to put any timeline on that."
