Iran sign $3.2bn petchems agreement with HEC

Iran’s state-run Ahdaf Investment Company, a subsidiary of the Oil Pension Fund Investment Company signs a $3.2bn agreement with Hyundai Engineering (HEC) to develop the second phase of the Kangan petrochemical plant.

The seconf phase of the Kangan petrochemical plant is planned to produce 1mn metric tons/yr of ethylene as well as 750,000 mt/yr of light and heavy polyethylene.

According to a report by Iran’s oil ministry, the second phase will be 95% funded by Korea. The Ahdaf Investment company has already invested Euro 120mn to cover 30 percent of the cost of the first phase, which is aimed at extracting gas liquids from South Pars.

The first phase will become operational four years after the final investment decision, which could be taken in nine month’s time.

This is the third major agreement, signed between Iran and foreign companies in petrochemical projects after removal of western sanctions on Iran’s nuclear program in January 2016.

However, it is not easy for Iran to attract western investment and technology to this sector, which needs $55bn investment by 2025 if it is to triple its petrochemicals output to the planned 180mn mt/yr.

Speaking at S&P Global Platts European Petrochemical Conference in Dusseldorf on Wednesday, industry consultants Aman Amanpour said that investments in Iran would see ethylene production expand by 5 million mt, propylene by 5 million mt, methanol 15 million mt, MEG by 2 million mt and aromatics and derivatives by at least 2 million mt.

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