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Iran Economy Update
Issue 63/2017 THURSDAY JUNE 15
Iran in talks with American Honeywell to acquire PDH1 petrochemical technology An Iranian petrochemical sector official has confirmed that negotiations have commenced with UOP Honeywell, a leading international suppliers and technology licensor for petroleum refining, gas processing, and petrochemical production which is based in the US. The discussions are on the provision of technology and establishing a new PDH unit with the annual capacity of producing 550,000 tonnes of propylene from propane. According to the Persian-Language Energy News website, the unnamed official said the construction of this PDH unit will require 500-550 million euros in investment, and expressed hope that if an agreement is achieved with UOP Honeywell, the plant will be installed in the Assalouyeh region in less than 3.5 years.
Energy News wrote that Nigel Orchard, the general manager of UOP’s Process Technology & Equipment business in Europe, Africa and CIS visited Iran in the last Persian month of Ordibehesht (21 April- 21 May). Details about the discussions are not available.
In a separate development, Shana news agency reported on Monday that the Iranian Parsian Oil & Holding is holding negotiations with a Japanese company to acquire technology to produce glycol ethylene in Iran. Details are still unknown.
Iran says technical talks with Korean/Japanese companies are final for Siraf refinery project
The managing director of the Siraf Complex Infrastructure Company said the construction operations have started and an Iranian and a Japanese company (TOYO)
1 Propane DeHydrogeneration is a process step in the production of propylene from propane
are conducting basic design/engineering of plant utilities. The project’s technology has been acquired from Haldor Topsoe (Denmark), Axens (France), and KT (Italy).
According to the Energy News website, Alireza Sadegh-Abadi said that along with the procurement of technology, we have managed to secure insurance coverages from Swiss Serv (300 million euros) the UK Export Finance ($1 billion), German Hermes ($1 billion), and Korean export insurances ($2 billion).
Sadegh-Abadi said that preliminary agreements had been signed with ThyssenKrupp (Germany), Daelim &
Hyundai (South Korea), CHIYODA (Japan) Tecnimont (Italy) and Wison (China) for implementing the project in the form of EPCF2. After appraising the proposals, he said, we are now finalizing Heads of Agreement (HoA) with Daelim, Hyundai and CHYODA. The official explained that the project requires $3 billion in investment and all technical and contractual talks with the Korean and Japanese companies are final and the project’s cost will be finalized in three months.
...More about Siraf Condensate refinery: It was about two years ago this time that Petroleum Minister Bijan Zangeneh said that building the Siraf complex to refine gas condensate is in line with implementing the Economy of Resistance polices which call for avoiding the sale of raw materials and turning crude oil, gas and condensate into high value-added products. Addressing a local ceremony on June 9, 2015, Zangeneh said with the completion of the Siraf refining complex the export of [unrefined] gas condensates will be stopped. “One of the most important purposes of building the
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2 Siraf refineries is increasing Iran’s export of oil products such as LPG, heavy and light naphtha, jet fuel and gas oil,” he said.
The Siraf Complex is located in the Pars Special Energy Economic Zone (PSEEZ), Bushehr Province, and would comprise eight refineries with the refining capacity of 60,000 bpd of condensates each. At that time, the then PSEEZ Managing Director Mehdi Yousefi said that the complex enjoys a variety of economic advantagesfor potential investors including its proximity to the South Pars field, the availability of export terminals in the Persian Gulf, and access to the warm waters.
Energy ministry says more than technology/equipment, power and water projects in Iran are in need of finance provision
ISNA news agency has shed light on the priorities that will shape the ministry of Energy’s agenda in the Rouhani’s next government. The news agency wrote that securing financial resources for completing water and electricity projects is what Energy Minister Hamid Chitchian has cited as the most important priority of the ministry in the next four years. According to ISNA, Chitchian has said that Iran already has the required technology in the water and power sector and local contractors and equipment manufacturers in this sector are qualified and equipped with necessary technology, and it is securing financial capabilities that provide the space for a jump in this industry at the current juncture. The minster told ISNA that the capital investment made by the private sector and foreign finance can accelerate progress towards achieving development goals in water/electricity sectors in Iran.
Industry ministry elaborates on conditions for issuing import permit to foreign manufacturers
The deputy minister of Industry, Mine &
Trade elaborated on the conditions foreign companies need to meet to receive a representative office permit in Iran, ILNA
reported on Wednesday. Yadollah Sadeghi, the deputy minister for economic &
commercial affairs said that according to Article 4 of the Law of Protecting Rights of Consumers, the importers of all durable and capital goods should provide after-sale services in Iran. He said that those who are going to import durable/capital goods should first register with an administrative system and made necessary commitments. “For example, for the importation of foreign cars and home appliances, the importers are obliged to guarantee a 10-year and 5-year after-sale services, respectively. After they make such commitments, and after they introduce the after-sale service offices, we issue license for their imports,” said Yadollah Sadeghi, according to ILNA. “The duration of such certificates is based on the contract’s duration the importer signs with the overseas manufacturer, and if they renew the contract, we also renew the certificate after evaluating the new conditions,” added Sadeghi. He explained that since the Iranian customs and order registration systems are integrated, the foreign brands that don’t have representative office in Iran cannot import goods.
Of note, the Trade Promotion Organization (TPO), affiliate with the ministry of Industry, Mine & Trade published a list of the foreign cars that are allowed to be imported in the current Iranian year, which excluded cars brands of Kia, OPEL, AUDI, Hyundai, Skoda, and Se.at. Tasnim News agency wrote on April 5 that “The main reason for the reduction of the number of the cars allowed for imports is issues such as observing the criteria set by IRISI (Institute of Standards & Industrial Research of Iran) or the Environment protection organization.
Also, part of the decline can be attributed to the changes in regulations the ministry of Industry made last year.” One day later, the president of the Iranian car importers association told Tasnim news that “as far as I know, Atlas Khodro had acquired the representative office of KIA motors in Iran but this company may have failed to receive
3 the confirmation of the ISIRI and the Environment Protection Organization.” The speculations went on when Tasnim news on the same day wrote that the certification of the representative office of KIA Motors in Iran expired on 30 November 2016 and was not further extended.
ICT minister: international cooperation is of principal pillars of ministry’s policies Iran’s ICT Minister Mahmoud Vaezi declared Iran’s desire for international cooperation in this sector and called it one of the “principal pillar’s” of the ministry’s policies, IRNA reported on Wednesday.
Speaking at the World Summit on Information Society (WSIS) Forum in Geneva, Vaezi boasted that in the telecommunication sector, this government has pursued policies including the improvement and diversifying services, reducing service costs, cooperation with the private sector, attracting foreign investment, outreaching services to rural areas, protecting innovative activities and welcoming high technology for enhancing efficiency.
