Following the inking of Memoranda of Understanding (MoUs) for conducting developmental studies in Azadegan oil field with France’s Total, Britain’s Royal Dutch Shell and Inpex Corporation of Japan, a cooperation agreement will be also inked in the current week between the largest Malaysian oil firm PETRONAS and the National Iranian Oil Company (NIOC) to carry out similar studies in Iran’s joint oil field with Iraq.

Moreover, NIOC will also sign into another deal with the Malaysian side in order to perform studies for boosting recovery factor in Cheshmeh Khosh field.

In recent months, NIOC has sealed several MoUs with Austria’s OMV and Gazprom of Russia aiming to increase recovery factor of Cheshmeh Khosh in the west of Iran.

The accord between NIOC and PETRONAS is scheduled to be signed on Wednesday in Tehran between officials of the two oil companies.

On the sidelines of his meeting with Minister of Foreign Trade and Industry of Malaysia Dato’ Seri Mustafa Muhammad, Iranian Oil Minister Bijan Zanganeh said Iran welcomes arrival of Malaysian firms, Petronas in particular, since they hold a long history of relations with the country’s oil industry.

Prior to sanction years, the bulk of cooperation between National Iranian Oil Company (NIOC) and Malaysia pertained to sales and exports of crude oil as Iran was deploying a daily average of 50 to 60 thousand barrels of crude oil to Malaysia’s PETRONAS under spot contracts, he continued.

One of NIOC’s most significant deals with Petronas was over the developmental project of South Pars Phase 11 which was supposed to be accomplished in collaboration with France’s Total and Repsol S.A. of Spain though the agreement was violated as a result of international sanctions against Iran.

Despite having had only a few years of activity in the oil and gas industry, PETRONAS remains among rare oil and gas companies who enjoy functionality and operational teams in both upstream and downstream oil sectors.

The Malaysian oil and gas company is currently active in numerous fields including oil and gas refining, construction of pipelines, LNG transfer, gasoline stations management, manufacturing and marketing of petrochemicals and chemicals, exploration, exploitation, drilling, production and storage of crude oil, petroleum products and natural gas.

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Following the signing of an Agreement in Principle (AiP) with France’s Total S.A. company on development of South Pars Phase 11, the French firm will seal two more agreements today with NIOC.

One contract to be inked between the two sides today on Wednesday December 07 pertains conducting studies and development of Azadegan joint oilfields.

The accord follows an earlier meeting in December between Iran’s Oil Minister Bijan Zanganeh and Chairman and CEO of Total Patrick Pouyanné held on the the sidelines of OPEC summit in Algeria where the two sides mulled over venues to develop South Azadegan oil field.

NIOC and France’s Total had also sealed a confidential disclosure agreement in March in order to develop Iran’s South Azadegan joint oilfield with Iraq and the French side was required to present its technical bid in six months’ time.

Earlier, the Project Director of the Development Project of South Azadegan Seyyed Mahmoud Mar’ashi estimated that the required volume of investment for the project will be less than five billion dollars in order to reach a daily production of 300 to 320 thousand barrels of crude oil.

In the current time, about 50 thousand barrels of crude oil is being extracted from the joint oil field while completion of the first developmental phase will raise the output to 100 thousand barrels per day by the end of the current year.

In addition to the deal on Azadegan, another agreement is slated to be signed with Total over expansion of Kish gas field as one of the NIOC Recent Discoveries which was discovered in 2006.

A total of 12 wells have so far been drilled in Kish gas field, which is a giant independent field close to Kish Island in the Persian Gulf, and three developmental phases have been defined to realize five billion cubic feet of gas.

The third contract, however, will be endorsed today between NIOC and Royal Dutch Shell on development of Yadavaran joint oilfield. It remains noteworthy that the first phase of development in the Iranian field has been carried out by Sinopec of China.

With completion of Phase 1 of North Azadegan oilfield, in collaboration with China National Petroleum Corporation International (CNPCI), the production at Yadavaran joint field has also surged to 115 thousand barrels per day as a result of cooperation with Sinopec.

Oil production at the joint oilfield with Iran has currently reached 115 thousand barrels which exceeds the initial commitment made for the first developmental phase by approximately 30 thousand barrels.

Yadavaran oilfield has a reservoir of 17 billion barrels and a potential to produce 300-400 thousand bpd of crude.

Iran’s Oil Minister Bijan Zanganeh had previously said the MDP of phase II of North Azadegan and Yadavaran oilfields has been approved by Chinese contractor SINOPEC and China National Petroleum Corporation (CNPC) under an initial contract, adding “Iran is ready to hold multilateral negotiations with Chinese companies within its accepted framework.”

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From 2008 to 2015, Iran’s petrochemical industry had not used finance and usance. But thanks to efforts by the administration of President Hassan Rouhani and the conclusion of the Joint Comprehensive Plan of Action (JCPOA) we have been witnessing achievements in the petrochemical industry. Finalization of an agreement between Kian Petrochemical Plant and Germany’s Linde is a case in point.
The most important and the most practical measure by the Iranian government in favor of the private sector has been its efforts to win guarantee for foreign investment in the petrochemical sector. In the past, foreign companies invested in Iran because the government guaranteed exports of petrochemical products, but today there is no such a guarantee. Therefore, the government is seriously looking for a solution to resolve this problem. Germany’s BASF and Linde, France’s Axens, South Korea’s Hyundai, Royal Dutch Shell and South Africa’s Sasol are among top companies engaged in negotiations with Iran. All of them have been speaking about the issue of guaranteeing investment in Iran’s petrochemical industry. They know quite well that the rate of return on deposits in the banks is about one percent, while the rate of return on investment in Iran’s petrochemical projects is at least 20 percent.

Petchem Plants Startup

Over the past several years, Iran has been stepping up construction of petrochemical plants. According to official data, the number of operating petrochemical plants has increased from 46 in 2013 to 53 today with an output of 54 million tons a year. Three more petrochemical plants are projected to become operational in one month. Therefore, the rated capacity of these petrochemical plants will cross 64 million tons.

Furthermore, more than 50 other petrochemical plants with a nominal capacity of 41.3 million tons are under construction. Experts see the startup of these 50 projects as the second jump in Iran’s petrochemical industry to bring the country to its real standing in this sector.
Over the past two years, 11 petrochemical projects have come on-stream in Iran. Some of these projects are unique as they have become operational while Iran was international restrictions.

Some of them are as follows: hydrogenation unit of Shazand Petrochemical Plant, Petrochemical Research and Technology Company’s the semi-industrial HDPE unit, Fajr-2 centralized utility, Ilam HDPE unit, PBR/SBR unit of Takht Jamshid Petrochemical Plant, West Ethylene Pipeline’s 8th to 10th tranches, Lorestan HDPE/LDPE unit, Urmia Petrochemical Plant’s sulfuric acid unit, Mahabad Petrochemical Plant’s HDPE/LDPE unit, Shohada ammoniac/urea unit in Marvdasht, Assaluyeh ethylene glycol (Morvarid Petrochemical Plant) and the second phase of 11th olefin project (Kavian Petrochemical Plant).
The startup of petrochemical projects will continue in Iran. According to plans, 11 projects with a capacity of 6.2 million tons are to become operational this calendar year to March 2017. Furthermore, 6 other projects are forecast to come online next calendar year.

Petchem Sales Up in Iran

Conditions have improved for Iran’s petrochemical exports following the implementation of JCPOA last January. Iran’s petrochemical exports have grown 25% post-sanctions.

Over the past three years, Iran’s petrochemical sales has increased from 27.3 million tons to 39 million tons a year, earning the country $19.7 billion in revenue.
The value of Iran’s petrochemical exports is nearing its previous levels. In 2012, Iran gained $12 billion from petrochemical exports. Today, its revenue stands at $10 billion although oil prices have been almost halved.

Over these years, Iran’s petrochemical industry has always insisted on the completion of the value chain and downstream industries through proposing new development projects of high value-added and acceptable economic justification based on spatial planning studies with a view to exporting products, completing value chain for presentation to qualified investors, helping value engineering in petrochemical projects for reducing costs and providing infrastructure and utility for meeting the needs of the private sector.

Target-Oriented Petchem Projects

A gap created in the research and technology of Iran’s petrochemical industry due to widespread privatization in this industry over the past two years has been healed. Private companies, in cooperation with Petrochemical Research and Technology Company (PRTC), are constantly looking for making research projects practical and boosting cooperation with this state-run company. At present, the research and development network in Iran’s petrochemical industry is one of the largest networks in Iran.

Leading research centers towards practical studies and resolving problems of petrochemical industries have been among the effective measures taken by the current administration.
Helping acquire technical know-how for producing chemicals and catalysts needed in the petrochemical industry in collaboration with Iranian elite and the National Foundation of Elites and domestic capabilities like universities and PRTC, indigenizing technical savvy and engineering services including issuance of license, basic design of petrochemical products, helping commercialization of indigenized technical savvies, supporting domestic manufacturing of equipment needed in projects, cooperation with legal bodies for improving business environment, helping remove red tape and streamline bureaucracy, examining bottlenecks in manufacturing companies and finding solutions to them have all been on the agenda of the government.

The first chemical park in Iran, which is based on the styrene and butane value chain, has been envisaged in Pars Special Economic Energy Zone. The project, which has been privatized, will use 600,000 tons of styrene produced by Pars Petrochemical Company. The construction activities of the chemical park are steered by National Petrochemical Company (NPC).
Over the past three years, all those involved in Iran’s petrochemical industry have constantly focused on endogenous and practical research programs. Over this time they have made great achievements, some of which are as follows:

Technical savvy for olefin furnace, technical know-how for rotating packed bed (RPB), technical savvy for UHMWHD production, technical savvy for biodegradable polyethylene films in LDPE and LLDPE grades, technical savvy for HDPE process, technical savvy for two grades of polyvinyl alcohol (PVA) production, technical savvy for producing epoxy vinyl ester, indigenization of technical knowledge for producing MMP high-density polyethylene, technical savvy for Netzer SB magnesium chloride and magnesium ethoxide, technical knowledge for producing Glycerol Monostearate (GMS), basic technical savvy for spherical gamma alumina, technical savvy for MEK catalyst, technical savvy for LTSC catalyst, basic technical design for ZnO Modified catalyst, technical savvy for isomerization catalyst for refineries, and technical savvy for alumina-based palladium for complete saturation process of olefins.
Over the past one and a half years, important contracts have been signed in petrochemical research and technology.

Awarding license for propylene-via-methanol (PVM) process to Sabzevar Petrochemical Plant, awarding license for methanol production process to Sabzevar Petrochemical Plant, awarding license for the production of two catalysts for polyethylene production (IRSAC 518 and IRSAC 3530) to Lorestan Petrochemical Company, awarding license for dehydrogenation catalyst to Exir Farayand Novin company (used at Bandar Imam Petrochemical Plant), awarding license for methanol catalyst production (Sadr Shimi Company), awarding license of catalyst (EDC 6) to Gohar Saram Company, signing research contract for acquiring technical savvy for naphtha isomerization catalyst to be used at Isfahan refinery, contract for applying technical knowhow for polymer concrete with PRTC for repairing concrete structures at Mobin Petrochemical Plant, production and sale of 800 kilograms of MEK 9 catalyst to Shimi Tax Aria, production and loading of 1.5 tons of dry reforming catalyst for Khuzestan Petrochemical Plant and joint cooperation with Hampa Energy Hedco for mastering ammoniac technical know-how.
PRTC, as the research arm of Iran’s petrochemical industry, has achieved good results from the catalysts it has produced in industrial tests. These results include the production of 1.5 tons of dry reforming catalyst for Khuzestan Petrochemical Plant, production of 800 kilograms of catalyst for Shimi Tax Aria Company, production of 1.5 tons of IRSAC 510 (similar to THS) for Maroun, Amir-Kabir and Shazand petrochemical plants, production of 50 kilograms of PZ catalyst for Mitsui polyethylene for Bandar Imam Petrochemical Plant, production of 20 kilograms of dehydrogenation catalyst for Bandar Imam Petrochemical Plant, production of 60 kilograms of DLP peroxide for Bandar Imam Petrochemical Plant, production of 600 kilograms of methanol catalyst, production of 30 tons EDC catalyst with its own technology for Bandar Imam Petrochemical Plant, production of three batches of 50-kilogram MMP catalyst for HDPE demo consumption at the Arak center of the company, production of 20 kilograms of acetic acid catalyst for Fanavaran Petrochemical Company and successful replacement of catalyst at Jam Petrochemical Company.

New Technologies for Petchem Sector

Today the state-of-the-art oil and gas technologies could be seen at petrochemical plants across the globe. Due to its high value-added, this industry has always encouraged investors to benefit from cutting edge technologies. In Iran, in spite of restrictions, experts and researchers are in quest for new technologies. They try their best to apply new technologies to new projects. For instance, meticulous studies have been conducted to prevent sale of raw substances and complete the value chain and create new capacities for high-value products like propylene. Over the past two years, lots of activities have been done in this sector. For instance, 52 new projects have been introduced for implementation under the 6th Five-Year Economic Development Plan and afterwards with a view to completing the production chain, location of new petrochemical development projects, making new estimates and envisaging feedstock needed for new petrochemical projects.

Among other important activities of the 11th administration regarding petrochemicals are the formation of specialized working groups like the working group for removal of obstacles to production, settlement of disputes between companies, settlement of disputescompanies. between companies and the stock market in setting feedstock prices and clearing accounts of privatized

By Javad Asghari, Source: Iran Petroleum

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The MoU was signed by NPC CEO Marziyeh Shahdaei and Hans Nijkamp, the head of the department for Iran affairs at Royal Dutch Shell.

Nijkamp was quoted by the media as saying that the signing of the MOU came after months of negotiations between the two companies.

Iran’s deputy petroleum minister for international affairs, expressed optimism that petrochemical projects between Shell and the NPC would be launched

“We believe that we can have joint projects in the petrochemical field with the NPC,” he said.

“This document will provide us with a framework for more project discussions with the NPC.”

Shahdaei, for her part, emphasize that the NPC has serious plans to increase its production to 160 million tons per year by 2025 from the current volume of 60 million tons per year.

Also, Amir-Hossein Zamaninia, Iran’s deputy petroleum minister for international affairs, expressed optimism that petrochemical projects between Shell and the NPC would be launched soon.

“With the wisdom that we see in the people working in our country’s petrochemical industry, without a doubt the projects of the NPC will be executed sooner than oil and gas projects,” he said, according to Shana.

The company was involved in the development of Iran’s Soroush and Norouz oil fields in Persian Gulf waters. It was also planning to develop a gas liquefaction project called Persian LNG in Iran’s South Pars energy zone. However, it later cancelled its plans to that effect as a result of the sanctions.

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