Wednesday Feb 21, 2018

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Bushehr Petchem Plant to Start up Next Year

(Monday, January 22, 2018) 12:13

TEHRAN, (Shana) -- The implementation of Iran's nuclear deal with six world powers and the ensuing removal of sanctions on the country, gave a new lease of life to Iran's petrochemical industry. Many projects that had started six years ago are close to completion.

 

The implementation of Iran's nuclear deal with six world powers and the ensuing removal of sanctions on the country, gave a new lease of life to Iran's petrochemical industry. Many projects that had started six years ago are close to completion. One of them is Bushehr Petrochemical Plant (BPP), which is part of Phase II of Assaluyeh petrochemical projects. Once operational, it would add 6.6 million tonnes of chemicals and polymer products to Iran's petrochemical output.

Located in the Pars Special Economic Energy Zone (PSEEZ), BPP is being operated by private sector for €1.9 billion plus IRR 2,500 billion. It is owned by Armed Forces Social Security Investment Company (60%) and Maroun Petrochemical Company (40%). BPP is being developed in three phases and includes eight processing units plus utilities.

Gholam-Reza Mostajab ad-Daveh, CEO of BPP, told "Iran Petroleum" that Phase 1 of BPP includes sweetening and ethane and methanol recovery, Phase 2 consists of olefin, glycol, and polyethylene units, and Phase 3 comprises acetic acid and vinyl acetate monomer units.

According to plans, utility units are expected to become operational by next March, while sweetening and methane recovery units would come online later next year. The CEO of BPP expresses hope that the three units of sweetening and methane and methanol recovery would come online before June.

"According to our plans, BPP will run at 70% of capacity and we will soon reach 100%," he said.

Financing Framework

Implementation of this project dates back to 2011. The primary agreements for the establishment of these units were sealed. A year later, the agreements for the engineering unit were executed. At present, engineering, purchase and installation of equipment are more than 90% complete.

Since BPP is privately-owned, the financing of the project was to be partly handled by equities of stakeholders.

Mostajab ad-Daveh said that China had provided the entire €1.9 billion for the project in 2015.

Private shareholders would provide 15% of the financing, and the Chinese financer would account for 85%. But the IRR 2,500 billion would be provided by the private shareholders.

Sanctions and Restrictions

Ministry of Petroleum was concentrating on the development of petrochemical industry, while tough restrictions had been imposed on Iran. The sanctions had posed a serious challenge to financing and purchase of equipment.

"The sanctions were like a double-whammy sword as they had restricted purchase of parts from Europe and receiving license from Europe," said Mostajab ad-Daveh.

"Nonetheless, we did not wait for the Europeans' financing or license, but we decided to remove the obstacles in one way or other. We made our purchases from China, but we received our technical knowhow from European countries either directly or indirectly," he said. "For example, we obtained our technical knowhow for the methanol unit from Swiss Casale."

"As long as we had not found a financer we were using the equities of our shareholders, but as of March 2015 when the Chinese finance started the construction operations began," he said.

Products Sold Out

Iranian petrochemical units are currently able to supply most of domestic needs thanks to the diversity of their polymer and chemical products. They are also able to increase their exports.

Development of petrochemical market is not an easy job due to tough competition.

Mostajab ad-Daveh said any company producing petrochemicals is a rival for BPP.

"However, we are not worried at all about selling our products, because based on my experience in Iran's petrochemical industry over the past 20 years we will  definitely market our products," he said.

"During years of sanctions when tough conditions were governing Iran's petroleum industry we managed to sell our products. Naturally our conditions have now improved," he added.

Separation is one at the gas sweetening unit to produce methanol or ethylene. Some of this ethylene is used as feedstock for glycol units and the entire methanol produced could be exported. Ethane is supplied to ethylene units, but other products like propane, butane and sulfur are exported.

Most commodities used in the development of BPP are supplied domestically. China, South Korea and West Europe are also among suppliers of commodities.

Iran plans to make optimal use of all existing advantages and complete the supply chain of petrochemical industry. For the National Petrochemical Company (NPC) officials, the top priority in Iran's strategic petrochemical policies is to upgrade the standing of this industry in the region and the world through enhancing the production capacity of petrochemical products and being present in world markets.

Since the turn of Iranian calendar year in March, 31 million tonnes of petrochemicals has been supplied by Iranian plants, 10 million tonnes of which has been sold domestically and the rest has earned Iran $6.5 billion.

The startup of BPP is expected to help Iran win a greater share of petrochemical market and enhance its petrochemical exports significantly.

 

Courtesy of Iran Petroleum