News ID: 196038
Published: 0322 GMT July 04, 2017

Total nears deal to invest $2b in Iran's petrochemical industry

Total nears deal to invest $2b in Iran's petrochemical industry

Total and Iran have reached a preliminary agreement to build three petrochemical plants in a deal, which, if finalized, could see the French oil major investing up to $2 billion (£1.5 billion) in Iran, said an Iranian oil industry official on Tuesday.

According to Shana, Managing Director of Iran's National Petroleum Company Marzieh Shahdaei further noted, "In the latest talks, the two sides have reached agreement for the construction of petrochemical plants with a total capacity of 2.2 million tons of petrochemical and polymer products per year.

"We predict that Total would invest $1.5 to $2 billion in Iran's petrochemical industry if we reach final agreement."

A spokesman for Total said: "Total and Iran's National Petrochemical Company are currently working on an in-depth study of an ethane-based petrochemical project whose figures (Capex especially) have to be fine-tuned."

The preliminary deal on the petrochemical plants follows Monday's agreement by Total to go ahead with Phase 11 of Iran's South Pars offshore gas field development project — the first major Western energy investment in the Islamic Republic since the lifting of sanctions against it.

Total's Chief Executive Officer Patrick Pouyanne said after the signing of the South Pars deal that it would open the door for more business with Tehran.

South Pars is part of the world's largest gas field which is shared with neighboring Qatar.

Total is active in both Iran and Qatar as well as the UAE.

Total's CEO told Reuters last month the petrochemical plants project in Iran was less advanced than South Pars 11 because Total would need to fund that project with loans from banks while South Pars could be developed with its own funds.

Iran's Deputy Oil Minister Amirhossein Zamani-Nia said on Monday that Iran and Total have held 'positive talks' to cooperate in petrochemicals but added that the deal was not final.

An oil industry official said in January that Iran plans to build 25 petrochemical plants and is currently seeking $32 billion in foreign investment to fund projects.



Facilitating technology transfer


Meanwhile, in a meeting with Pouyanne in Tehran on Monday, Iranian President Hassan Rouhani said a multibillion-dollar gas deal signed between Iran and French energy giant, Total, will facilitate the 'transfer of technological, scientific and managerial experience' between Iran and France.

President Rouhani said France holds a prominent position in the field of economy and energy technology.

"Signing and implementing this contract will be a positive step toward further expansion of economic and technological cooperation between the two countries," the Iranian president added.

He noted that his administration sought to sign the landmark nuclear agreement, known as the Joint Comprehensive Plan of Action (JCPOA), with the P5+1 in order to lay the ground for enhancing Iran's economic cooperation with giant companies.

Iran and the five permanent members of the United Nations Security Council — the United States, France, Britain, Russia and China — plus Germany signed the agreement in July 2015 and started implementing it in January 2016.

Under the JCPOA, Iran undertook to modify its nuclear program in exchange for the removal of nuclear-related sanctions.

"Fortunately, the existence of political will [both] on the Iranian side and among the P5+1 countries led to the agreement with Total," Rouhani said.

National Iranian Oil Company (NIOC) and Total signed the contract — the first by a European firm in more than a decade — in Tehran on Monday to develop Phase 11 of South Pars field, which is the world's largest gas field.

According to Total, the project will have a production capacity of two billion cubic feet per day or 400,000 barrels of oil equivalent per day including condensate. Total added that the produced gas would supply the Iranian domestic market starting in 2021.

The first phase of South Pars gas field development project will cost around $2 billion, the giant French energy corporation said.

The Iranian president further stated that major foreign companies can invest in projects in Iran's oil and gas sectors valued at around $200 billion.

Pouyanne stressed the importance of making efforts to implement the deal and expressed hope that it would pave the ground for further cooperation among Iran and other European companies.

He called for bolstering cooperation between Iranian and European companies in various sectors, saying that Total had decided to boost long-term cooperation with Iran in the fields of gas, oil and petrochemicals.

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