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Japan, South Korea interested in Iran’s petchem industry

20 June 2016 13:45 (UTC+04:00)
Japan, South Korea interested in Iran’s petchem industry

By Fatma Babayeva

Iran is moving forward with its plans to boost the country’s petrochemical industry and increase exports of finished petroleum goods.

The Islamic Country is in talks with Japanese and South Korean investors to attract funds worth €520 million to its petrochemical projects in the form of letter of credit.

Managing Director of Iran’s Petrochemical Commercial Company International (PCCI), a subsidiary of Persian Gulf Petrochemical Industries Company (PGPIC), Isa Mashayekhi told Shana news agency that the company has initiated negotiations with Japanese and Korean investors for that purpose.

Mashayekhi noted that South Korean credit line for Iran is estimated to equal to €13 billion, whilst Japanese line to €10 billion. The credit is expected to be available in August 2017.

Iran's Ministry of Economy and Finance should provide state guarantees with the supervision of the Central Bank of Iran for PGPIC to access credit lines from other countries alike Japan and South Korea, according to the Managing Director.

Iran has recently signed a contract with Swiss Welding Engineers Ltd in the petchem sector for the construction of a plant for the production of the synthetic polymer ESBR which is a strategic product used in the petrochemical industry and rubber manufacturing.

Earlier in May, South Korean contractor Daewoo Engineering and Construction (Daewoo E&C) concluded a MoU with Iranian engineering firm Bahman Geno to carry out construction of an oil refinery in Bandar Jask located in the southern coast of Iran, which will have the capacity of 300,000 barrels per day.

Additionally, the Islamic Republic inked a deal with South Korea SK E&C to develop and optimize Iranian oil refineries. The cost of the contract amounts to $20 million.

Iran controls the second largest oil refining capacity in the Middle East region after Saudi Arabia. Its current crude oil refining capacity, including gas condensate, equals almost to 1.8 - 1.85 million barrels per day.

The Islamic Republic plans increasing its oil refining capacity to 3.2 million barrels a day by 2020.

Iran will upgrade its refineries in Tabriz, Tehran, Isfahan, and Abadan and build three new one - Bahmangenoo, Anahita and Pars refineries.

In the meantime, Iran plans to decrease gasoline imports to zero in 2016 with the implementation of the first phase of the Persian Gulf Star Refinery.

Previously, Iran expressed an interest in buying shares of existing refineries or building new ones abroad, and held talks with Spain, Indonesia, and Brazil.

The removal of anti-Iran sanctions following a nuke deal signed with the world powers has helped Tehran to pursue a rapid boom in its oil industry.

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Fatma Babayeva is AzerNews’ staff journalist, follow her on Twitter: @Fatma_Babayeva

Follow us on Twitter @AzerNewsAz

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