News ID: 230788
Published: 0638 GMT September 04, 2018

Iran inaugurates $1.85 billion worth of petrochemical projects

Iran inaugurates $1.85 billion worth of petrochemical projects

Rouhani: Iran will export oil despite US pressure

Economic Desk

President Hassan Rouhani on Tuesday inaugurated the operation of a project creating 3.4m metric tons per year (mt/y) of new methanol, urea and ammonia capacity at a cost of $1.85 billion.

The projects are Marjan Methanol’s 1.65 million mt/year unit, along with 1.75 million mt/y urea and ammonia unit of Pardis Petrochemical Complex in Iran’s energy hub of Assaluyeh.

“The country’s petrochemical and polymer production capacity is currently around 62.15 m mt/year. With the inauguration of Pardis and Marjan petrochemical plants, this capacity will pass 65.55 million mt/year,” said Reza Norouzzadeh, managing director of National Petrochemical Company.

A third project to generate 648 megawatts of power also became operational. Phase One of Damavand Petrochemical Utility Plant will provide electricity to 12 petrochemical facilities on top of 780 metric tons of steam, Shana said.

The 12-turbine Damavand plant is being developed in three phases with the ultimate capacity to generate 1,900 MW of power plus industrial water, oxygen, steam and wastewater treatment for petrochemical units.

Pardis Petrochemical Plant also got its third urea and ammonia unit up and running, making the 5.26m mt/y facility the biggest producer of the molecules in the world, according to Shana.

Addressing the ceremony, President Rouhani said the launch of the petrochemical projects in one day shows that Iran can “overcome all problems and the enemies will not be able to stop the Iranian nation’s path to progress.”

“Putting these projects into operation is a great step toward employment for the youth, self-sufficiency… and bringing more forex into the country.”

Rouhani suggested that the United States is trying to pressure Iran through sanctions, though he did not explicitly name the US.

“The enemy says ‘I want an Iran that’s in my control, that’s in my fist,’” Rouhani said. “This is impossible...They want to pull us back 40 years, to surrender.”


Iran oil export

The president said that Iran will continue exporting crude oil despite US efforts to stop it through sanctions.

Rouhani said the US is targeting oil exports as part of efforts to reimpose sanctions on Iran.

“We will continue by all means to both produce and export oil,” he said. “Oil is in the frontline of confrontation and resistance.”

Several senior officials attended the inauguration, with Defense Minister Amir Hatami saying the projects symbolize the realization of Iran’s resistance economy, investment attraction and boost of exports and foreign exchange earnings.

The minister said 15 percent of the sum used in the projects had come from direct investment and the rest in the form of foreign financing.

The resistance economy is Iran’s blueprint to counter sanctions through increasing the country’s resilience to subversive policies of adversaries.

Iran is facing new US sanctions which senior officials see as tantamount to an all-out “economic war.”

The first wave of sanctions targeting Iran’s financial, automotive, aviation and metals sectors came into force in August, with the second wave due to kick in two months from now and hit the country’s exports of oil and its derivatives.

Washington is trying to stop Iran’s petrochemical, steel and copper exports, and to disrupt its ports and shipping services.

Iranian officials are clear-headed about the impact of the US “economic war,” but they have stressed that the measures will not curb the country’s development plans.


$32 billion foreign investment

In the petrochemical sector, Iran is seeking investment to build 25 projects which are estimated to require $32 billion in foreign investment. The projects range from ammonia and urea to gas-to-olefins (GTO) and gas-to-propylene (GTP) plants.

The country is already a major methanol producer. According to digital media company GlobalData, Iran has the highest planned methanol capacity additions globally.

Norouzzadeh said two other methanol plants, Bushehr and Kaveh, are in the final construction phase and will be launched before the current Iranian year ends on March 20.

Iran is expected to add 30 million metric tons per year to its capacity from 2018 to 2022, accounting for 54 percent of the total global planned methanol capacity additions.

It is not clear yet whether the reintroduction of US sanctions could delay the implementation of Iran’s ambitious projects, including more than 4m mt/year of methanol capacity, which the country plans to bring on stream in 2018.


Iran’s methanol customers

The US has a special interest in trying to curb Iran’s methanol exports. The country is due to more than triple its capacity from 2015 to 7.5m mt/y by the end of 2018, shifting from importer to exporter, with Europe and Asia within its sights.

With its major methanol-to-olefins capacities, China is the biggest importer of Iranian methanol. According to China Customs, the country took in 2.5m metric tons of molecules from Iran in 2017.

Beijing - also Iran’s biggest oil client - has pledged to keep imports steady despite US sanctions.

Iranian methanol shipments also go to Europe which has pledged to maintain trade with the Islamic Republic, with Italy accounting for the bulk of imports in the past few years. 

Major European powers have reactivated a law which is purported to protect businesses against US sanctions on Iran. However, a number of European firms have been winding down business with Iran for fear of facing US retributions. 

European buyers lifted about 130,000 metric tons of Iranian methanol in 2017, with a monthly average of around 11,000 mt, according to data from statistical agency Eurostat.

Press TV, Reuters, AP and contributed to this story.




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