Repairs Cut Output at Shazand Petrochem Co.

Repairs Cut Output at Shazand Petrochem Co.
Repairs Cut Output at Shazand Petrochem Co.

Production at the Shazand Petrochemical Complex reached 615,000 tons in the March-September period, close to one-third of its output compared to a year ago, managing director of the Shazand Petrochemical Company (SPC) said.

"With the delivery of several projects, nominal production capacity has reached 1.6 million tons per year," Khodadad Gharibpour was quoted by Shana news agency as saying Monday. Shazand's output reached 1.8 million tons in 2012 and 2013, maintaining the level of production for two consecutive years. However, output dwindled in the present year due to the complex being shut down during the summer for major repairs.

The complex was established in Arak in Markazi Province in the vicinity of Imam Khomeini Oil Refinery of Shazand. Its first phase came on stream in 1993, and China, Turkey, Afghanistan, Saudi Arabia and Iraq are among its major customers.

According to Gharibpour, Shazand plays an important role in the downstream sector of the petroleum industry, as it supplies petrochemicals to more than 5,000 production units, including textile, medicine, detergent and cosmetics.

  Ministry Dues

Refineries and petrochemical complexes have a $3.7 billion debt to the oil ministry, member of the Majlis planning and budget committee said. Jafar Ghaderi said the oil ministry intends to open a letter of credit (L/C) to sell feedstock to petrochemical companies. Under the new scheme, companies will open an LC, and the ministry will receive the sum from the bank. The ministry must deposit the income generated from feedstock at the treasury.  Should the ministry default, the treasury has the authority directly withdraw the sum from the accounts of the ministry and its subsidiaries. The ministry, on the other hand, cannot independently collect dues from petrochemical companies.

Ghaderi insisted that the cutting of the supply of feedstock to petrochemical companies as leverage is "illogical," as it would harm production.Total value of Iran's petrochemicals is estimated to reach $22 billion by the end of the year, 10 billion of which is to be used domestically and the rest will be exported.