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IPF Exclusive, July 2013


Tenth Iran Petrochemical Forum | Summit 2013

Chabahar Petrochemical Development Plan


In March 2012, SATA decided to assign the task of management of the ethane gas pipeline as well as preparation of Chabahar Petrochemical infrastructure, off site facilities and utilities projects, to NEBCO


In an exclusive interview with Iran International, Mr. Abbas Sha'ri elaborates on the establishment of NEBCO (Nemat Business Development Company) and Chabahar petrochemical development plan which is on the agenda of the company:

 

Mr. Sha'ri, You as assistant to Mr. Nematzadeh Please explain; how come he has been involved in Chabahar Petrochemical Development Plan?

Before I answer to your question let me begin with an introduction:

In 2006 when Mr. Nematzadeh was retired, he began to think about the issue of being more helpful for development of Iranian industries especially in the field of Oil, Gas, and Petrochemicals. This led him to prepare necessary ground for establishment of a team of those who have extensive knowledge and experience, and also devotion to bring the wishes and wills of investors to reality in an economical and profitable way. With this background he established NEBCO.

For more information you may refer to NEBCO Website; www.nematco.ir.

Now back to your question I would like to explain that according to the Cabinet Resolution dated 29/4/ 2011 Both Minister of Oil & the Governor of Sistan & Baluchistan were assigned to do the following tasks:

  • Prepare Chabahar as a hub for Petrochemical Industries,

  • Carry out Feasibility study for transferring South Pars ethane gas to Chabahar through a new pipeline.

 


A preliminary estimated budget for all three phases is about 10 billion dollars, and for infrastructure, utilities, tank farm and terminals, and all other offsite facilities, together with ethane pipeline is about 4 billion dollars


Later on Minister of Oil and Minister of Defense in a meeting dated 04/10/ 2011 agreed to assign the job of performing feasibility study and execution of the ethane gas pipeline project to SATA Investment Co.

In March 2012, SATA Managing Director decided to assign the task of management of the ethane gas pipeline as well as preparation of Chabahar Petrochemical infrastructure, offsite facilities and utilities projects, to NEBCO under leadership of Mr. Nematzadeh.

These are the facts behind the involvement of Mr. Nematzadeh in Chabahar project.

 

What has been done by Mr. Nematzadeh afterwards?

After receiving the letter of assignment, Mr. Nematzadeh, based on his past experiences in Ministry of Industry, and National Petrochemical Co. and the previous studies done by NPC during the years 2004 & 2005, for creating a third hub of Petrochemical Industries in Chabahar, he invited four reputable Iranian consulting companies previously involved in the first and second Petrochemical hubs in Bandar Imam & Assaluyeh, for the following tasks respectively:

  • Rahshahr International Group; for preparation of Conceptual design, Master Plan, and Detailed Design of infrastructures.

  • Sazeh Pardazi Iran; for design of different cooling waters networks also for liquid and solid products transportation rout.

  • Nemat Petro Safe Company; for Environmental and Eco- system Studies, both in land and in the Gulf of Chabahar,

  • Tose'-e- Energy Paydar; for conceptual, basic and detail design of ethane pipeline.

 

At the same time, for expediting the relevant activities, Mr. Nematzadeh established a company by the name of "Mokran Negin Development Co." wholly owned by SATA, and appointed a qualified person with valuable executive experience in Assaluyeh, as its Managing Director.

 

What is the outcome of these activities?

In brief I would say:

 

1 - In March 2013 after one year work, based on detailed investigation done by relevant consulting company the site location has been finalized and 1000 hectares of land with dimensions of 2.5x 4 Km, has been purchased from Chabahar Free Zone Organization.

 

2 - Based on studies done in NPC for Chabahar during the years 2004 & 2005, 16 basic Petrochemical Complexes have been foreseen to be constructed in three phases in the above land as follows:

  • 4 Urea/ Ammonia plants, with a capacity of 1.275 million T/y each,

  • 4 Mega Methanol Plants, with a capacity of 1.650 million T/y each,

  • 2 Methanol/Ammonia plants, with a capacity of one million T/y of Methanol
    and 300 KT/Y of Ammonia each.

  • One propylene & Polypropylene plant with a capacity of 450 KT/Y.

  • One DME Plant with a capacity of 800 KT/Y.

  • 2 Olefin & Polyolefin complex; one with 1000 KT/Y, and the other with
    1300 KT/Y of capacity.

  • One Aromatics Complex with 4000 KT/Y of capacity.

  • One Crystal Melamine plant with 60 -80 KT/Y of capacity.

 

Besides, in the purchased land, enough space has been foreseen for downstream industries.

Utility consumption of the above plants has been roughly estimated on the basis of actual consumption of existing plants in operation.

 A preliminary estimated budget for all three phases is about 10 billion dollars, and for infrastructure, utilities, tank farm and terminals, and all other offsite facilities, together with ethane pipeline is about 4 billion dollars, while the total income of all production units is estimated roughly to be more than 10 million dollars per year.

 

Who is going to invest in all above projects?

For investment in these projects we have considered the following scheme:

  • Infrastructures, and related Facilities by SATA Investment Co.

  • Utilities, offsite and interconnection by SATA investment Co.
    plus other investors and consumer companies

  • Petrochemical Plants all by private iranian and non-iranian investors

  • Ethylene pipeline by olefin plants investors and SATA investment Co.

  • Tank farm and terminals by private investors, and consumer companies,

 

Apart from SATA, have you received any other request for investment?

Yes, we have received letters of interest from three Iranian firms and an Indian one.

 

It is said that transferring of ethane gas from Assaluyeh to Chabahar is costly therefore; it dramatically reduces the rate of return of olefin projects.

Total cost of ethane pipeline project estimated by the consultant is around $ 600 million. If we depreciate the above cost in 15 years and add the effect of yearly operation cost to it, at most, we will reach to $ 50 per ton. By considering the amount of savings achieved (by lower transportation costs for export, and tax exemption in Chabahar Free Zone), the difference will become negligible against $ 1200/T of ethylene sale price.

 

As the last question, what would be the role of NPC in between?

NPC is potentially a powerful company with vast experience in research and development, planning, execution and operation of different petrochemical projects and complexes. But under existing circumstances, it can only play an important role to support the privatized and private companies as well as new projects by the knowledge and expertise of its personnel and also its rich and valuable Technical Document Center.

 

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  July 2013
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