Iran to Set Up New Petrochemical Complex in Masjed Soleiman

[23.07.2011 16:43]
Iran to Set Up New Petrochemical Complex in Masjed Soleiman

Iran on Saturday started construction of a petrochemical complex in Masjed Soleiman city in the Southwestern Khuzestan province in a ceremony attended by First Vice-President Mohammad Reza Rahimi, Fars News Agency reported.

The urea production project carried out on 400 hectares (1000 acres) of land near the city of Masjed Soleiman and Zilayee gas field is comprised of four phases, the first phase of which was launched today.

The plant is due to produce ammonia from the gas extracted from Zilayee gas field and will then produce urea from the ammonia.

Iran, the world's fifth largest oil producer, exported around 14mln tons of petrochemical products worth more than $12bln in 2010.

The country inaugurated a number of giant petrochemical projects in Khuzestan province in Southwestern Iran in February in the presence of President Mahmoud Ahmadinejad.

One of the projects was Amir Kabir Light Petrochemical Polyethylene worth $310 million with a production capacity of 300,000 tons a year.

In May, Rahimi stressed that Iran plans to double the volume of its petrochemical products by building dozens of production units across the country.

"The capacity of annual petrochemical production in Iran stands at 51mln tons and we are going to double this capacity by creating 66 different units to add 65mln tons to the current figure," Rahimi said, addressing the 9th International Petrochemical Forum here in Tehran.

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17:25
European market through Iraq and Syria

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Islamic gas pipeline contract to export and deliver gas through Iraq and Syria to be signed –

http://www.irandailybrief.com/?p=3259

On July 25, an agreement will be signed between Iran, Iraq and Syria to deliver Iranian gas through the two other countries. The agreement will be signed in the presence of the head of Iran’s Ministry of Petroleum and the Ministers of Petroleum of Syria and Iraq. With the signing of the agreement, natural gas produced from the South Pars gas field in Iran will be delivered to the European market through Iraq and Syria. (Sabad News)

50% increase in oil exports to China in first half of 2011 – China’s customs organization announced that in the first half of 2011, China will import 2,654,411 tons of crude oil from Iran, up by more than 50% over the corresponding period the previous year. (Fars)

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Reuters
China oil barter system(To trade goods or services without the exchange of money.)won't solve Iran's woes

(The author is a Reuters Breakingviews columnist. The opinions expressed are her own)

By Una Galani
DUBAI, July 26 (Reuters Breakingviews) - Iran may not have much choice, but selling oil under a barter system won't solve the country's woes. International sanctions make it increasingly difficult for buyers of Iranian oil to finance their imports. A payment dispute recently led to a suspension of Iranian oil sales to India. Now Teheran and Beijing are exploring ways to barter oil for Chinese goods. But even if China sends machinery instead of money to circumvent U.S. sanctions that are increasingly hampering payments, Iran's economy will remain vulnerable without hard currency.
The oil-for-something system is tried and tested, although it is more common among poorer countries. Venezuela, for example, provides around 100,000 barrels of discounted oil to Cuba, accounting for around half of the island country's total consumption. In return, Cuba acts as a contractor, sending sends teachers and doctors to Venezuela. The arrangement helps Cuba to get oil it could not afford otherwise.
Similarly, China manufactures goods that Iran needs -- machinery accounts for around 15 percent of the Persian Gulf country's imports. With bilateral trade already at around $30 billion last year and growing, it wouldn't be too hard to offset the oil trade estimated at around $10 billion, or 540,000 barrels per day, in the first half of this year. That is equivalent to about 20 percent of Iran's total oil exports.
Iranians are accustomed to bartering their way around international sanctions. Speedboats zip daily across the Strait of Hormuz to the Musandam Peninsula in Northern Oman carrying sheep or goats. Vessels make the return journey loaded with electronics and cigarettes that U.S. manufacturers are prevented from exporting to the country. But sanctions are also making it harder to get things like spare parts for airplanes.
A barter system could preserve Iran's valuable relationship with China, which extends beyond oil and into areas like transport and aluminium. However it would still leave Iran searching for the steady supply of foreign funds it relies on to stabilise its own currency, which was devalued last month and remains under pressure amid inflation fears. It is unclear how much of Iran's forecast $122 billion reserves have been spent addressing the problem. But as sanctions bite into key trade relationships, Iranians aren't inclined to trust their own currency.

CONTEXT NEWS
-- Iran and China are discussing using a barter system to exchange Iranian oil for Chinese goods and services, as U.S. sanctions have blocked China from paying at least $20 billion for oil, the Financial Times said on July 25.
-- The paper, citing people familiar with the problem, said U.S. financial sanctions against Iran meant China might owe the oil-rich country as much as $30 billion.
-- The people said the unpaid oil bills had built up in the past two years and the governments, which are in early-stage talks, were looking at how to "offset" the debt, the FT reported.
-- The paper said some Iranian officials were growing increasingly angry about the inability of the country's biggest oil customers such as China and India to pay cash, which has contributed to a shortage of hard currency for the country.
-- However, Chinese officials told Reuters that the payments for oil were ongoing and that were no pending debts between the two countries, as China has regularly paid in euros. Sources added that the idea of settling some of the trade in yuan was still on the table.
-- Top exporter Saudi Arabia approved sales of 3 million barrels of extra crude to India for August to make up for a loss of shipments from Iran due to a payment dispute, sources with direct knowledge of the sale told Reuters.

((una.galani@thomsonreuters.com))
(Editing by Pierre Briançon and David Evans)