Total, Iran to Sign Petrochem Agreement
Tehran is making efforts to double annual petrochemical production capacity from the present 65 million tons by opening up the sector to foreign investors
The Persian Gulf Petrochemical Industries Company is close to finalizing an agreement with French energy major Total S.A. to conduct feasibility studies on petrochemical ventures in Iran, the managing director of PGPIC said.
"Serious talks are underway with two multinationals, one of which is Total, to attract $9.5 billion in investment for commencing petrochemical joint ventures," Adel Nejad-Salim was also quoted as saying by NIPNA, the official news agency of National Petrochemical Company on Sunday.
Highlighting the significance of winning foreign investors' trust, Nejad-Salim said, "As long as mega petrochemical ventures are not internationally funded, government and non-government bodies cannot help the potentially lucrative industry flourish."
Asked about the location of plants, the official noted that the Pars Special Economic Energy Zone in Asalouyeh and the Parsian Special Economic Energy Zone in Bushehr Province are being studied by domestic experts and a final decision will be made soon.
Total has reached a preliminary agreement to build three petrochemical plants, with a total capacity of 2.2 million tons in a deal that, if finalized, could see the French oil major investing up to $2 billion in Iran.
"The first preliminary agreement calls for constructing two polyethylene units plus an ethane cracker unit to convert ethane to ethylene," Nejad-Salim said, adding that the two sides have also agreed on building a unit to manufacture polymeric products.
Reportedly, Shell also signed an agreement with the National Iranian Oil Company last year on expanding cooperation in the key petrochemical industry.
The Anglo-Dutch company has agreed to invest $350 million in a major petrochemical project in Hamedan Province, but analysts say its venture in Iran's petrochemical sector could soar to as much as $6 billion.
Tehran is making efforts to double annual petrochemical production capacity from the present 65 million tons by opening up the sector to foreign investors. Iran has said it needs $72 billion in foreign investment for 80 major petrochemical projects.