Turkey's Gamma Company, a leading firm active in the energy sector, has signed a memorandum of understanding with Khuzestan Governorate on the production of petrochemicals, including polypropylene, in the city of Izeh.
The agreement, worth $1.2 billion, was signed by Gamma's representative, Dondarf Koncal, and Gholamreza Shariati, the governor general of Khuzestan Province, on Monday in Izeh, IRNA reported.
Some $1.05 billion of the project will be financed by an unnamed German-Turkish company.
Describing the prospective petrochemical plant in Izeh as a major lucrative project, Koncal expressed hope that the company would succeed in implementing the project.
Khuzestan Governor General Gholamreza Shariati assured the Turkish representative of the profitability of the project, saying that the licenses for establishing the company in Izeh have been issued and they are waiting for the approval of the government’s Economic Council.
Commenting on the advantages of the scheme, Shariati noted that natural gas will be the principal feedstock of the plant and over 98% of the consumed energy will be converted into usable products to cope with concerns for energy waste along with the reduction of air pollution.
"The methanol produced by burning gas will be used to manufacture several other chemicals," he said.
Shariati noted that the plan entails establishment of 100 midstream and downstream production units, which would create over 25,000 direct and indirect jobs.
--- Petrochem Trade
Tehran and Ankara have taken considerable steps to ease petrochemical trade.
The two countries held several talks on the matter in late 2017, during which Turkey expressed readiness to levy lower tariffs on Iranian petrochemical products.
Iran has recently presented a list of five petrochemical products to Turkey for duty cuts, including polyethylene terephthalate, toluene diisocyanate, polypropylene copolymer and polystyrene, besides polyethylene, methanol and urea, which were already in line to get cuts on import tariffs by Turkey.
Petrochemical is Iran's most important industry after oil and gas. The country produced 50.61 million tons of petrochemicals in the fiscal 2016-17 that ended in March, of which 20.3 million tons, worth $9.5 billion, were exported, government data showed.
According to the Iranian Oil, Gas and Petrochemical Products Exporters Union, petrochemical exports currently have a $10-11 billion share in the country's annual revenues that are expected to exceed $30 billion by 2022.
To reach the goal, the country is trying to expand its target market to European countries, as it is currently dealing with only Asian countries, such as China, India and South Korea.
