Transferring payments for sales and securing insurance for exports remain the biggest hindrances for petrochemical producers, said Mohammad-Hasan Peyvandi, vice president of Iran's National Petrochemical Company. He spoke in an interview at his Tehran office.

 

"There are problems with exporting petrochemicals, but they relate to issues surrounding insurance," Peyvandi said. "It has gotten better. In the past three to four months, we've had between 4-to-6% increases in production and exports." 

 

Chemical output rose from the 40.6 million tons and exports from the 13 million tons achieved in the Iranian calendar year through March 2014 due to better industry management, economic conditions and lower inflation, he said.

 

Foreign investment in Iran's chemical and energy industry is restricted by western sanctions designed to dissuade the Islamic republic from pursuing a nuclear program the US and its allies say may lead to atomic-weapons technology. Iran, which says its nuclear plans are peaceful, and six global powers have given themselves until Nov. 24 to agree on limits to the nuclear program in return for lifting sanctions.

 

Under the agreement governing the talks, insurers can underwrite ships transporting Iranian goods and European and US companies can again purchase Iranian petrochemicals. The short window for sanctions relief -- initially meant to last only six months before last month being extended another four to November - has made it harder to benefit from eased restrictions on chemical sales and banking, Peyvandi said.

 

Iran's planned USD20 billion petrochemical hub at Chabahar on its southeast coast may be open to foreign investment once restrictions are lifted, Peyvandi said. The port has direct access to the Arabian Sea and Indian Ocean and sits at the end of a natural gas pipeline to Pakistan, across the border.

 

The country is investing to tap global markets and could triple petrochemical production capacity to 180 million metric tons, Deputy Oil Minister and National Petrochemical President Abbas Sheri-Moqaddam said in an interview June 7. Output at that level could bring in revenue of at least $90 billion, he said, without specifying a time frame for the expansion.

 

As MRC informed previously, in early 2013, Iran opened a new petrochemical plant in the western province of Kermanshah. The Kermanshah Polymer Petrochemical Plant has an annual production capacity of 300,000t of heavy polyethylene. It will employ nearly 1,500 people and is also expected to market nearly USD429mln petrochemical products annually. 

 

Earlier, in late 2012, Iran had also launched two other petrochemical projects, which include Kavian Petrochemical Complex and the West Ethylene Pipeline in Assaluyeh, both located in the onshore installations of the South Pars Gas Field, Persian Gulf. Kavian Petrochemical Complex, with a capacity of 2.18 million tonnes per annum for petrochemical production, is the main source of ethylene for the West Ethylene Pipeline.