Total`s Agreement to Build Petchems Plant in Iran Makes Headway

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Total and Iran have reached a preliminary agreement to build three petrochemical plants in a deal. which. if finalized. could see the French oil major investing up to $2 billion (£1.5 billion) in Iran. said an Iranian oil industry official on Tuesday.

According to Shana. Managing Director of Iran`s National Petroleum Company Marzieh Shahdaei further noted. `In the latest talks. the two sides have reached agreement for the construction of petrochemical plants with a total capacity of 2.2 million tons of petrochemical and polymer products per year.

`We predict that Total would invest $1.5 to $2 billion in Iran`s petrochemical industry if we reach final agreement.`

A spokesman for Total said: `Total and Iran`s National Petrochemical Company are currently working on an in-depth study of an ethane-based petrochemical project whose figures (Capex especially) have to be fine-tuned.`

The preliminary deal on the petrochemical plants follows Monday`s agreement by Total to go ahead with Phase 11 of Iran`s South Pars offshore gas field development project — the first major Western energy investment in the Islamic Republic since the lifting of sanctions against it.

Total`s Chief Executive Officer Patrick Pouyanne said after the signing of the South Pars deal that it would open the door for more business with Tehran.

South Pars is part of the world`s largest gas field which is shared with neighboring Qatar.

Total is active in both Iran and Qatar as well as the UAE.

Total`s CEO told Reuters last month the petrochemical plants project in Iran was less advanced than South Pars 11 because Total would need to fund that project with loans from banks while South Pars could be developed with its own funds.

Iran`s Deputy Oil Minister Amirhossein Zamani-Nia said on Monday that Iran and Total have held `positive talks` to cooperate in petrochemicals but added that the deal was not final.

An oil industry official said in January that Iran plans to build 25 petrochemical plants and is currently seeking $32 billion in foreign investment to fund projects.