Governor of the Central Bank of Iran (CBI) Abdolnasser Hemmati announced that his country’s petrochemical sector will witness a significant growth with a huge investment of up to $3.7 billion by People's Bank of China.
Hemmati said on Monday that China’s main credit insurance provider Sinosure is providing insurance for finances of up to $3.7 billion allocated by People's Bank of China to refining and petrochemical projects in Iran, adding that the huge sum will further expedite the expansion of the country’s petchem sector.
“We will soon witness a significant increase in prtchem production,” said Hemmati in a post on his Instagram page, adding that the Chinese investment will go to five different projects in various parts of Iran.
The announcement comes amid major plans for empowering the downstream section of Iran’s oil and gas industry amid tough sanctions imposed by the US which has made direct oil sales more difficult.
Iran has been exporting more of its petrochemcials since the US imposed the sanctions in November last year while estimates sugges the value of such shipments from the country could reach $25 billion by 2021. That figure equals to half of Iran’s total crude sales before the sanctions were imposed.
Hemmati said the petchem sector is currently a major provider of hard currency for the Iranian government, adding that that a fifth of the country’s total currency needs are provided through the sales of the petrochemical companies.
The CBI chief said that petchem companies had managed to bring back more than 90 percent of the income they had earned from exports despite banking restrictions that make payments by customers more difficult.
As part of a massive plan, the Iranian government eyes to increase the annual revenues earned from production of petrochemicals in the country to $93 billion by 2025.
Meanwhile, speaking on Monday, Iran’s Oil Minister Bijan Namdar Zanganeh said Iran’s petrochemical production capacity is expected to reach 100 mt/y by 2021 from currently around 54 mt/y, adding that the country will reap a total of $25 billion in petrochemical revenues by the year, almost twice as much as current figures.
According to him, the second leap in the petrochemical industry will end by 2021 and preparations for the third leap were made by the administration so that Iran’s petrochemical exports would reach $37b by the end of the administration.
Last week, Jam Polypropylene Company announced that it had set a new production record in the first 8 months of the current calendar year, which began on March 21.
According to the company, the plant’s polypropylene output was 13% higher year on year during the period.
A subsidiary of Jam Petrochemical Company, Jam Polypropylene Company supplied 185,519 tons of PP during the period.
The last production record of the company dates back to Iranian calendar year of 1396 (which ended on March 2018), when it supplied 182,777 tons of the item in the first 8 months of the year.
The facility is expected to produce 270 tons of PP by the end of the year.