Sector News

Shell signs letter of intent to study petchem projects in Iran

October 11, 2016

In a move that could signal Royal Dutch Shell’s return to the petrochemical scene in Iran, the company signed a letter of intent (LOI) on 9 October with National Petrochemical Co. (NPC; Tehran, Iran) covering cooperation in the energy sector, including petrochemicals.

The LOI was signed by NPC CEO Marziyeh Shahdaei and by Hans Nijkamp, Shell’s head of Iran affairs. Shell has confirmed to CW it has signed the document. “We can confirm that we have expressed our interest to further explore potential areas of cooperation with National Petrochemical Co. through a letter of intent,” the company says.

Nijkamp said during the signing the cooperation will involve “enhancements” to gas-to-liquids (GTL), among others. He says the document would provide Shell and NPC with a framework for further project discussions. Shell could be involved in a gas-based cracker, diesel, GTL, and other projects, which would also be of interest to Iran, he adds. But now is too early to put a timeline on the possible projects, Nijkamp says.

Shahdaei says NPC plans to increase its total production to 160 million metric tons/year (MMt/y) by 2025 from the current 60 MMt/y, and Amir-Hossein Zamaninia, Iran’s deputy petroleum minister/international affairs, expressed optimism that petrochemical projects between Shell and NPC would be launched soon. In 2003, Shell pulled out of a petrochemical project it had been planning in a joint venture (JV) with Basell—then a JV between BASF and Shell—and NPC. The JV, Olefins 8, had been planned at NPC’s Bandar Imam, Iran, complex.

Shell is the latest company to consider investing in Iran’s petrochemical sector following the lifting of international sanctions. Total signed a memorandum of understanding (MOU) earlier this year with NPC to study constructing a jointly owned petrochemical complex in Iran, and Sojitz (Tokyo, Japan) signed an MOU last week with NPC to study constructing a methanol-to-propylene plant. NPC has also said it is talking with BASF on possibly jointly building a petrochemical complex in southern Iran, but BASF has denied this.

By Natasha Alperowicz

Source: Chemical Week

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