Iran's Petrochemical Industry Seeks to Attract $60 Billion in Foreign Investment

Iran is negotiating with international companies such as Mitsui from Japan and Total from France to attract $60 billion in foreign investment. This level of investment aims to double the production capacity of petrochemical products in the next 10 years. Marzieh Shahdaei, the CEO of the National Petrochemical Company of Iran, stated in an interview with Bloomberg that the company intends to increase production capacity to 150 million tons per year by 2026. This means completing 55 unfinished projects and launching 28 new petrochemical units. If successful, this program would more than double the production of this company compared to the current output of Saudi Arabia's Sabic, which is the second-largest petrochemical company in the world by sales. Following the lifting of international sanctions in January this year, Iran is seeking to modernize and develop its energy industry, including the petrochemical sector, to stabilize its economy. The country has increased crude oil production to pre-sanction levels and has also raised natural gas production. Iran holds the largest natural gas reserves in the world, which is a raw material for the petrochemical industry. According to Shahdaei, the problems with some of these projects relate to sanctions and financing. Although a large portion of the sanctions against Iran was lifted under last year's nuclear agreement, some U.S. sanctions remain in place. Iran claims this has made dollar-based banking transactions and the presence of many international banks in the country impossible. In December, Iran introduced about 60 projects to foreign investors at an international conference in Tehran, which included the presence of BASF, the largest seller of petrochemical products in the world. Shahdaei noted that Iran's current petrochemical production capacity is 60 million tons per year, which shows an increase of about one-third compared to the production of 46 million tons at the end of the last Persian year. Meanwhile, according to statistics from Saudi Sabic's website, this company has produced 69.7 million tons of petrochemical products annually since the end of 2014. This official stated that Iran earned $14 billion from petrochemical product sales last year, which included $9.4 billion in exports mainly to China and Europe. Shahdaei mentioned that last month Japan opened a $10 billion credit line for Iran, which could facilitate the trade of petrochemical products. In addition to Mitsui and Total, the National Petrochemical Company of Iran is also negotiating with several other companies from Germany, Italy, and Spain. However, Shahdaei did not name these companies as no memorandum of understanding has been signed with Iran yet. She said, 'Companies that have ignored us for years are returning. This is like the start of a race. They are preparing themselves at the starting line to begin their work as soon as the obstacles are removed.'