Germany’s BASF ready to invest $4B in Iran’s petrochemical project

Oil&Gas Materials 13 February 2016 14:24 (UTC +04:00)

Baku, Azerbaijan, Feb.13

By Dalga Khatinoglu- Trend:

The world's largest chemical company, Germany's BASF, has announced readiness to invest $4 billion in a petrochemical project in Iran.

The managing director of Iran's National Petrochemical Company (NPC), Marzieh Shahdaei, said BASF intends to take a 60 percent stake in the first phase of investment in Parsian Special Energy Zone, southern Iran, Shana news agency reported on February 12.

The remaining 40 percent investment will be secured by Iranian companies, Shahdaei said, adding that the German company is willing to raise the volume of investment in the next phases of the project.

"Water, electricity, and gas infrastructures have been provided and a tender will be held for establishing a harbor. So far, two Chinese and German investors have participated in the tender."

Before, the NPC director for planning, Hamid Reza Rostami, said in December 2015 that BASF was ready to invest $6 billion in Iran's petrochemical sector.

"The foreign company has decided to make direct investment in Iran and also transfer technology and management, and secure guaranteed market. We welcome such opportunities," the official added.

Part of the investment will be related to steam crackers and olefins, while other parts are related to propylene, gas-to-polymers and methanol-to-olefins, he explained.

Kurt Bock, chairman of the board of executive directors of BASF, has said, "German technology and quality of work are highly respected. So, we have good chances to reestablish links with Iran. Iran's petrochemical industry is progressing. When Iran rejoins the global economy, it will affect the markets."

Iran is planning to attract about $70billion in foreign direct investment in its petrochemical sector by 2025.

Following the conclusion of the Joint Comprehensive Plan of Action (JCPOA) between Iran and world powers, many companies from Germany, Italy and the Netherlands have already sent delegations to Iran, discussing opportunities for future cooperation.

Iran's petrochemical sector has set an annual output target of around 129 million metric tons by the end of the country's sixth five-year development plan (2021).

The country produced 44.5mn metric tons of petrochemicals in the past Iranian calendar year (ended on March 20, 2015), with over 10 percent rise from 40.5mn metric tons in its preceding year.

In the first nine months of the current Iranian fiscal year, started on March 21, 2015, the country produced 35 million metric tons of petrochemicals, of which 14.3million metric tons were exported, according to a report from the Iranian Oil Ministry's department for supervision over hydrocarbon reserves.

Based on the report, seven petrochemical projects were inaugurated in the first half of the current Iranian year.