Iran Plans Five Petrochemical Projects in Joint Ventures with Foreign Companies

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Researched by Industrial Info Resources (Sugar Land, Texas)--Iran's petrochemical industry continues to expand with the recent announcement of plans to set up five petrochemical projects in joint ventures with foreign companies during the current Iranian financial year, April 2009 to March 2010. State-owned National Petrochemical Company (Tehran, Iran) is expected to provide $2.5 billion of the estimated $8 billion required to complete the projects, with the remainder coming from bonds and foreign investments.

During the past Iranian financial year, the country exported 29.7 million tons of petrochemical products worth $7.1 billion. Plans for the current year forecast an export of 39 million tons. The major products exported include methanol, polyethylene, ethylene and liquefied petroleum gas.

Under the fifth and latest five-year Economic Development Plan, Iran intends to set up 47 petrochemical plants by 2015, which would add about 43 million tons per year of production capacity. This would boost Iran's production to more than 5% of global output and up to 36% of the total output from the Middle East.

Last month, Haldor Topsoe (Lyngby, Denmark) signed a contract with Marjan Petrochemical Company (Tehran) and Kimiaye Pars to supply technology, engineering design and catalyst for two methanol production units, each with a capacity of 1.6 million tons per year and an estimated development cost of $500 million. The units will use natural gas feedstock and will employ Topsoe's reforming and synthesis technology to produce methanol. Both units are scheduled to come online in 2013.

In another development, a joint venture was announced between Sadaf Petrochemical Company (Jubail, Saudi Arabia), Nargan Consulting Engineers (Tehran), Maire Tecnimont SpA (BIT:MT) (Rome, Italy) and Chemson Polymer-Additive AG (Arnoldstein, Austria) to develop a unit to provide 100,000 tons per year of raw materials for the tire-manufacturing industry at a cost of $340 million. Under the terms of the agreement, Nargan would be the executor of the project, while Maire Tecnimont will supply machinery and Chemson would be the licensor. Sadaf is jointly owned by Shell Chemicals Arabia LLC (Dubai, United Arab Emirates) and Saudi Basic Industries Corporation (SAU:2010) (Riyadh, Saudi Arabia).

Swedish and German firms have become heavily involved in developing an isocyanate plant at the Karoon petrochemical complex. Chematur Engineering AB (Karlskoga, Sweden) and Hansa Group AG (Duisburg, Germany) have invested $400 million in the plant, which will produce toluene diisocyanate and methyl diphenyl diisocyanate, both of which are used in the production of polyurethane.

Italy is also investing in the Iranian petrochemical industry. Industrie Generali SpA (Samarate, Italy) owns a 10% stake in the Hamedan medical grade polyvinyl chloride (PVC) complex, which is scheduled to begin production of 34,000 tons per year of PVC powder and 9,000 tons per year of PVC film specifically for the medical industry in 2009.

The presence of international firms in the Iranian petrochemical sector is not limited to European companies alone. In the Iranian-Venezuelan Joint Energy Commission meeting held earlier this month in Tehran, the two nations discussed the feasibility of setting up two petrochemical complexes in Iran.

The global economic downturn has had the effect of reducing demand for petrochemical products. The Middle East has vast supplies of raw feedstock for the industry and is well poised to increase its share of the worldwide production of ethylene from 7% in 2002 to as much as 15% by 2012. The global production of ethylene is expected to reach 160 million tons per year by 2012.

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