Chinese investors have started financing two under-construction Iranian petrochemical projects, a senior energy official announced.
"The letters of credit (LCs) for two petrochemical units each with a value of €350 million to €400 have been opened by Chinese financers," Deputy Head of the National Petrochemical Company (NPC) Mohammad Hassan Peyvandi told FNA.
He noted that one of the petrochemical units is Masjed Soleiman Petrochemical Complex and the other one is Sabalan Methanol Unit.
Peyvandi reiterated that the Chinese investors are financing the petrochemical units which convert methanol to propylene.
On February 17, the National Iranian Petrochemical Company's managing director Abbas Sheri Moqaddam said Iran needs $31 billion to inaugurate 60 semi-finished petrochemical projects.
"To date, just $5 billion is estimated to be spent in the projects," Moqaddam said.
Once the projects come on stream, they will increase the country's annual petrochemical output by 55 million tons, he said, adding, "$74 billion is needed to expand the national petrochemical industry within next 8 to 10 years."
China has recently increased its investment in Iran's petrochemical projects.
On May 14, Chinese firms announced that they would invest €470 million in the construction of Lordegan Petrochemical Complex, Southwestern Iran.
The Chinese companies have also pledged to finance Bushehr, Hengam, and Gachsaran petrochemical projects, in Southern and Southwestern Iran.
Chinese investors have expedited the process of financing some Iranian petrochemical projects after Iran and the G5+1 signed an interim agreement over Tehran's nuclear program in Geneva on November 24, 2013.
Some $7-8 billion is forecast to be invested by the Chinese investors in the petrochemical projects in Iran.
In June, Peyvandi announced that China plans to finance completion of seven under-construction methanol projects.
"All the existing 7 methanol projects will come on stream after China undertakes financing them," he told FNA at the time.
He noted that Lorestan, Mahabad and Sanandaj petrochemical projects are among the same projects which will come on stream this and next year, and added, "The Methanol projects of Assalouyeh and the projects of Lordegan and Zanjan will also come on line soon in future."
Peyvandi said that China plans to allocate a sum of approximately 2 billion euros to investment in a lucrative project in Iran's Southern port city of Bushehr to help complete the construction of a Petrochemical Complex in there, another move by the Chinese in their chain of investments in Iran's petrochemical industry.
Peyvandi reiterated that after the seven methanol projects come into stream the price of methanol will significantly come down in international and domestic markets.
Iran has significantly expanded the range and volume of its petrochemical products over the past few years, and the NPC has become the second largest producer and exporter of petrochemicals in the Middle East after Saudi Arabia.
Iran exports petrochemical products to more than 60 countries. The main destinations include the Far East, Central Asia, Southeast Asia and Africa.
Fars News Agency