Iran's NPC seeks foreign partners in petchem JVs

Iran's National Petrochemical Co. (NPC) is seeking as much as $1.7 billion in foreign investment over the next 2 years to set up six natural gas-based petrochemical joint ventures in and outside Iran. The units would have a combined output capacity of 6 million metric tons/year.

The projects include a $500 million methanol plant, with 660,000 tons/year of capacity, and a $300 million fertilizer complex in Azerbaijan, designed to produce 1,000 tons/day of urea and ammonia. NPC will reportedly allow foreign firms to hold majority stakes in some of the proposed projects.

Petrochemical push

Iran produces 14 million tons/year of petrochemical products and hopes to increase this capacity to 20 million tons/year by 2001.

The Iranian petroleum ministry is working to diversify its sources of revenue, which historically have been primarily oil-based. For this reason, it set up a special petrochemical economic zone in its Persian Gulf coastal region.

The six complexes in which Iran is seeking outside investment are part of 13 total petrochemical projects planned by NPC. The projects, valued at a combined $3.5 billion, are designed to add value to Iran's natural gas resource, which is the world's second largest. Iran plans to triple petrochemical production capacity to 41.4 million tons/year by 2010. Under a 1995-2020 program, more than $23 billion will have been spent on 29 basic petrochemical plants.

M. Sharifi, managing director of Iran's Petrochemical Commercial Co. (PCC-FZE), was quoted in the daily newspaper Gulf News as saying, "We have completed contracts for seven of these (13) projects, attracting an investment of at least $1.8 billion."

PCC-FZE is the sole representative for trading Iranian petrochemical products in the Middle East, Africa, and the former Soviet Union. It was established last year with capitalization of $271 million.

Iran is the second largest petrochemical producer in the Middle East, although the majority of its output is consumed domestically. Domestic sales of petrochemicals were $847 million last year, according to Sharifi, while exports totaled $500 million. France is Iran's biggest export market.