Iran launches paraxylene plant

Feb 16, 2001 01:00 AM

Iran launched a paraxylene plant with a capacity of 180,000 tpy, saying it was actively seeking foreign investment for the Middle East's second largest petrochemicals producer. "I have asked officials to lay the groundwork to attract private investment to our petrochemicals industry," President Mohammed Khatami said after inaugurating the $ 115-mm state-owned plant near the Gulf port of Bandar Imam Khomeini. "The ideal way to develop this industry is neither through buybacks or financing deals. We should instead create the conditions for foreign and private Iranian investment," Khatami said.
Plant director Hamid-Reza Rasouli told reporters the plant, financed by European companies including BNP Paribas, is one of the more advanced Middle Eastern producers of paraxylene, used in the production of polyethylene terephthalate (PET) bottles and polyester fibres. He said the unit was part of a project, also including a planned ethylene glycol unit, to produce 600,000 tpy of PET, most of it for export. Iran's domestic PET consumption is 100,000 tons.
All of the paraxylene plant's output would be exported in the next three years to pay for financing costs, Rasouli said. The new plant's owner, state-run National Petrochemical, started test production at the unit four months ago, already exporting 40,000 tons to countries including Pakistan, India and Thailand and earning $ 18 mm.

Iran's other paraxylene plant in the central city of Isfahan meets domestic needs with its output of 44,000 tpy. Iran, the Middle East's second largest petrochemical producer after Saudi Arabia, has sought foreign investment to help build five new petrochemical plants worth $ 6 bn until early 2005. Tehran plans to double petrochemical output to 30 mm tpy in the next five years.
Officials have said they were working out the legal and regulatory framework, including tax incentives, for investments. But the Islamic republic, facing US sanctions, has had limited success so far in securing petrochemical investments.
The call for foreign investment comes at a time when Iran is wooing foreign oil firms with oil and gas projects worth more than $ 8 bn in its largest energy opening in two decades. Iran has developed many of its energy projects through "buyback" deals in which a foreign firm recoups its investment and gets a profit by receiving part of the project's output.

Source: Al Nisr Publishing LLC
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