Shell is the latest chemical company to consider investing in Iran now that international sanctions over the country’s nuclear program are being eased on energy, banking, and other key Iranian industries.
The Anglo-Dutch firm says it has signed a letter of intent with Iran’s National Petrochemical Co. (NPC) to explore “areas of cooperation.” The letter, Shell notes, is nonbinding. The companies haven’t detailed plans for any particular investment.
In March, France’s Total agreed to study a petrochemical complex in Iran, also with NPC. And BASF was earlier reported to be considering a $4 billion investment in the country.
BASF won’t confirm any particular investment, but it acknowledges the potential to deepen its involvement in the country. “The lifting and the loosening of sanctions provide a basis for a stronger commitment in Iran,” the German chemical giant tells C&EN.
Iran is looking to rebuild its industry following lifting of the sanctions in March. According to the U.S. Congressional Research Service, Iran’s economy shrank by 9% in the two years ending March 2014. Oil production fell from 2.5 million barrels per day in 2011 to 1.1 million bbl in 2013.
NPC has the capacity to produce 61 million metric tons of chemicals annually. It hopes to nearly double that over the next decade, according to the Islamic Republic News Agency,
Iran isn’t the only place in the Middle East where Shell is considering an investment. The company has an agreement with Iraq’s Ministry of Industry & Minerals to develop an integrated ethylene cracker and derivatives complex in southern Iraq, possibly near Basra.
Shell recently approved plans to build a complex in Monaca, Pa., that will have 1.6 million metric tons per year of ethylene capacity as well as polyethylene plants. The company hopes to begin construction next year.