A Chinese line of credit, estimated at $2 billion, is now opened for four petrochemical projects, managing director of the National Petrochemical Company announced, Tasnim news agency reported Saturday.
Masjed Soleiman and Lordegan petrochemical complexes, Sabalan methanol unit, and Bushehr project are to be funded through the long-awaited Chinese LOC. "Obtaining Chinese credit used to be a long-winded process," Mohammad-Hassan Peyvandi said, adding: "However, the barriers are now removed."
After months of negotiations between the oil ministry, the Central Bank of Iran (CBI) and Chinese investors, the first LOC, valued at $375 million, was opened for a Gachsaran project in December.
Iran and China reached an agreement in October, based on which the latter will supply 50 percent of equipment for joint petrochemical projects. The new LOC is different from the Chinese share of equipments in projects it funds, Peyvandi noted, without further elaboration. "The Chinese are supplying state-of-the-art equipments and technology for these projects."
As the biggest oil importer from Iran, China has an outstanding balance on previous contracts, according to Mohammad Baqer Nobakht, vice president for planning and strategic supervision. China reportedly owes between $23.2 billion to $28.3 billion to Iran and has been committed to finance Iranian projects triple this amount. Iran aims to recover part of its oil revenues from China by allowing China to fund petrochemical projects.
"The government and the oil ministry seem to have no other option to recover the frozen revenues," Reza Padidar, chairman of the board of the Society of Iranian Petroleum Industry Equipment Manufacturers (SIPIEM), said in October, adding that turning to Chinese products and equipment is not good news for domestic manufacturers.
A total of 67 petrochemical projects with capacity to yield 60 million tons are yet to be completed. China will finance around 30 percent of these projects upon a final agreement with Iran.
