Director General of the Association of Petrochemical Industry Corporations (APIC) Ahmad Mahdavi said at least 50 million dollars of investment were required to complete unfinished projects in the country’s petrochemical industry; “so far, various negotiations have been made with the Iranian Parliament, Oil Ministry, Central Bank of Iran (CBI) as well as Ministry of Industry, Mine and Trade in a bid to expedite and facilitate allocation of financial resources to petrochemical projects.
The official recalled that the government has received necessary permit from the Parliament to guarantee projects which are economically justifiable; “development of petrochemical industry has reached a complete standstill in recent years,” he continued.
“The average rate of development and increased capacity in the Iranian industry was around 20 per cent in the years from 2006 to 2011 though the figure has plummeted to less than two per cent since then.”
In other words, the official said expansion of Iran’s petrochemical industry has faced recession while, under the terms of the Sixth National Development Plan, petrochemical production capacity is envisaged to climb to approximately 130 million tons per year.
Mahdavi enumerated two major challenges faced by development of petrochemical industry one being the unknown status of guarantees for foreign investment, especially financing of new petchem projects and the other being unconventional pricing formula for feedstock; “as announced by littoral states south of the Persian Gulf, they intent to make 300 billion dollars of investment in petrochemical industries by the year 2025.”
Ahmad Mahdavi touched upon Shale gas of the US as yet another major threat ahead of Iran’s petrochemical industry adding “America, with development of Panama Canal, seeks to export gas and even ethane to European and Asian states as evidenced by the fact that displacement time for transfer of gas from the US to Europe and Asia has been sliced to about 25 days.”
APIC director general went on to claim that Iran’s petrochemical industry was entangled in a severe recession in development and investment areas; “pricing formulas for petchem feedstock needs to become reasonable and proportionate to market prices of competing countries.”
“Saudi Arabia’s pro.dcution capacity for petrochemicals has amounted to over 85 million tons per year,” stated Mahdavi concluding “completion of new petrochemical projects is now faced with both general and specific difficulties which need to be classified and eventually, bottlenecks in development of petrochemical industry need to be eliminated through negotiation.”
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