China starts funding Iran petchem projects

Iran says China has started funding several of its petrochemical projects, adding that procedures to attract funds for over a dozen more projects have also started.

Abbas She’ri-Moqaddam, the managing director of Iran’s National Petrochemical Company (NPC), has been quoted as saying that China will provide funds for Iran’s Sabalan, Lordegan, Bushehr and Masjed Soleyman petrochemical projects.

She’ri-Moqaddam did not provide any figures on the amount of funds that China will provide. However, he had told the media in September 2014 that Iran has asked China to provide $13 billion for those projects.

The official added that the required funds for 18 more projects will be provided from Iran’s National Development Fund (NDF), reported Iran’s Persian-language newspaper Jahan-e San’at.

China reportedly owes Iran over $20 billion in outstanding oil payments. The cash has been frozen in overseas banks after the US-led sanctions made it difficult for Beijing to transfer money to Tehran. Accordingly, the two countries have reportedly reached a deal to settle a part of the frozen money through China’s funding of Iranian petrochemical projects.

Iran’s Ministry of Petroleum announced in September 2014 that the deal covers at least 12 Iranian petrochemical projects.

Iran says it needs $31 billion to inaugurate 60 half-complete petrochemical projects. It says once the projects come on stream, they will double the country’s current annual production capacity of 60 million tons.

Iran exported about 12 million tons of petrochemical products worth some $9 billion from March to December 2014. The country has already announced plans to increase its petrochemical exports to $12 billion this year.