Indian companies have expressed interest in investing in Iran’s petrochemical industry, director of the National Petrochemical Company (NPC) said Wednesday.
“Since Iran’s oil money remains frozen in Indian banks, New Delhi aims to reimburse part of that money through financing petrochemical projects in Iran,” Abbas Sheri-Moqaddam was quoted by IRNA as saying.
India settles 45 percent of its oil trade with Iran in rupees, with the rest held back by the refiners who buy the oil. These unpaid funds are released as and when Tehran is allowed to access them as part of the easing of financial restrictions imposed by the West over the country's nuclear energy program.
Sheri-Moqaddam said the government has given assurances to foreign companies that their investment in Iran's petrochemical projects will be secure.
“Foreign companies are eagerly waiting for the complete removal of anti-Iran sanctions,” the NPC chief added, noting that European companies prefer to start joint ventures in Iran once they are convinced that no political and economic restrictions threatens their investment. Iran's annual petrochemical production capacity is expected to hit 100 million tons from the current 60 million tons by 2020 if sanctions over Tehran's nuclear energy program are lifted.
Iran hopes to see its petrochemical production capacity increase 1.3 million tons by the end of the next Iranian year (March 2016), Sheri-Moqaddam said.
Iran produced 40 million tons of petrochemical products last year, while export of petrochemicals totaled $9 billion. "The number is projected to reach around $12 billion by the end of this year (March 20) as Iran plans to become the leading producer of petrochemicals in the Middle East," the official stated. Iran has significantly expanded the range and volume of its petrochemical production over the past few years, and the NPC has become the second largest producer and exporter of petrochemicals in the Middle East after Saudi Arabia.
Water-Intensive
Iran plans to establish petrochemical plants in the coastal regions, a senior official from the NPC said. Marzieh Shah-Daei was quoted by Shana as saying that the coastal provinces make a perfect location for petrochemical production process, "which usually consumes large volumes of water."
“Petrochemical industry is water and energy-intensive. That is why many petrochemical units are cutting down on production and exports as they face water shortage,” she said. The NPC official said that low precipitation poses a serious challenge to the development of petrochemical industry.
