0920 GMT May 22, 2019
Negotiations are being held between Iranian and Russian officials to sign new contracts ahead of the much-anticipated lifting of sanctions on Tehran, the Mehr news agency said on Sunday.
“Russia can become a new market for Iranian petrochemical products in the post-sanction era because exports of these products to EU countries currently have no remarkable economic viability due to lower crude prices,” the news agency said.
The global petrochemicals market of more than $3 trillion includes almost every commercial industry. The petrochemical industry chiefly involves manufacturing of plastics, rubber, nylon and other consumer products used in aviation, electronics, construction, pharmaceuticals and manufacturing.
Russian industries need to import petrochemicals from Iran, said Vadim Konakov, president and CEO of the SINIKON company which is a Russian-Italian joint venture.
Konakov touched on Russia’s 20-year development plan, saying renovating the country’s infrastructure would boost demand for petrochemical products.
Russia was among the top five producers of ethylene in the world before the collapse of the Soviet Union, but it has lost the position to Iran and Saudi Arabia.
Rising demand in recent years has led Russia swing from a net exporter to an importer of some key petrochemical products and polymers.
Iran’s petrochemical production will hit 70 million metric tons worth $27 billion in 2016, Managing Director of the National Petrochemical Company (NPC) Abbas Shari Moqaddam said earlier this month.
The country has set a target to produce $70 billion of petrochemicals, Minister of Petroleum Bijan Zangeneh said.
Iran plans to attract about $70 billion in foreign direct investment in its petrochemical sector by 2025.
Companies from Germany, France, Spain, Italy, the Netherlands, South Korea, Japan and even the US have indicated readiness to participate in Iran’s petrochemical projects.
BASF, the world’s largest chemical producer, plans $6 billion of investment in Iran’s petrochemical sector, director of planning at the National Petrochemical Company (NPC) Hamid Reza Rostami said recently.