Iran’s petrochemical sector gets $2.5b foreign investment offer
Iran has received an offer for $2.5 billion investment in its petrochemical sector from a foreign country, said Chief Executive of the National Petrochemical Company (NPC) Morteza Shahmirzaei.
“Amicable countries have many requests to invest in Iran in order to build petrochemical hubs in Makran and Jask. For example, one of the countries has put an investment proposal of $2.5 billion on the table. Unfortunately, due to sanctions, we cannot provide more details,” he said on Monday, according to Press TV.
Tehran will host the 14th International Iran Petrochemical Forum (IPF) next week. Shahmirzaei said experts and entrepreneurs of the petrochemical industry from 15 countries, including Brazil, Russia, China and several European countries will attend the event.
Seventy petrochemical plants are currently operational in Iran, churning more than 550 grades of products. The official said 10 more facilities will come on stream by the end of the current Iranian year (March 20, 2024).
“The capacity of Iran’s petrochemical industry has reached 92 million tons, and with the opening of new projects this capacity will reach 95 million tons by the end of the year,” he
said.
Petrochemical products are a crucial boon to Iran’s drive to weather draconian U.S. sanctions, which mainly aim to dry up the Islamic Republic’s oil exports.
Iranian officials say the wide diversity of petrochemical products and huge international demand for them due to their quality and price make the industry unsanctionable.
Washington imposed its initial sanctions on Iran’s petrochemical sector back in June 2019. It banned purchases of Iranian aromatic, olefin, and synthesis gas, and any of their derivatives, including ethylene, propylene, butadiene, benzene, toluene, xylene, ammonia, methanol, and urea.
The U.S. Treasury Department said in a statement at the time that the sanctions aimed to choke off financing for Iran’s largest and most profitable petrochemical group.
In February, the Biden administration imposed a fresh round of sanctions on several Iranian petrochemical manufacturers and their subsidiaries.
The sanctions also targeted three firms in Malaysia and Singapore over their role in the “production, sale, and shipment of hundreds of millions of dollars’ worth of Iranian petrochemicals and petroleum to buyers in Asia.”
Among the targeted Iranian companies were Amir Kabir Petrochemical Co. (AKPC), its subsidiary Simorgh Petrochemical Co., and four subsidiaries of the previously sanctioned Marun Petrochemical Co.
“Iran is increasingly turning to buyers in East Asia to sell its petrochemical and petroleum products, in violation of U.S. sanctions,” Undersecretary of the Treasury for Terrorism and Financial Intelligence Brian Nelson said then.
Iran’s petrochemical industry is largely self-sufficient, but it is dependent on imports for more than 25 percent of goods, equipment and chemicals, Shahmirzaei said.
“Even in some units, this amount of dependence reaches 30 percent. We have agreed with domestic technologists and knowledge-based companies to localize the equipment, which are mostly high-tech,” he said.
Currently, the localization of rotating machines is on the agenda, he added.
“We must produce all the world’s strategic petrochemical products in Iran, and it is necessary to move from selling raw materials to producing and selling final products.”
In 2021, Iranian experts updated for the first time a distributed control system (DCS) built by U.S. industrial conglomerate Emerson Electric at a petrochemical plant in the southwestern port of Mahshahr.
Distributed control systems are computerized platforms for automated control and operation of a plant or industrial process, usually with many control loops, in which autonomous controllers are distributed throughout the system.
The Emerson DCS used at the Shahid Tondgooyan Petrochemical Company (STPC) was obsolete, which had caused major production problems at the plant’s PET 1 unit, the company said in a statement.
The U.S. company’s refusal to cooperate and provide support because of the American sanctions prompted Iranian experts to revamp and update the system without disabling production units, it
added.