Iran is in talks with Mitsui & Co. Ltd. and Total SA as part of its push to attract $60 billion in foreign investment to more than double the country’s capacity to produce petrochemicals over the next decade.

State-run National Petrochemical Co. plans to increase output capacity to 150 million metric tons a year by 2026, Managing Director Marzieh Shahdaei said in an interview at her office in Tehran. That means completing 55 unfinished projects and 28 new production facilities, said Shahdaei, who also serves as deputy oil minister.

If it succeeds, Iran would be producing more than twice the current output of Saudi Basic Industries Corp., known as Sabic, the world’s second-biggest petrochemical maker by sales.

Iran is seeking to upgrade and expand its energy industry, including petrochemicals, in a drive to rebuild its economy after the easing of international sanctions in January. The Persian Gulf nation has boosted crude output since then to near pre-sanctions levels and ramped up production of natural gas. Iran holds the world’s largest reserves of gas, a raw material for petrochemicals.

Dollar transactions

“A number of these projects have had problems that go back to sanctions and financing,” Shahdaei said Wednesday. Although most of the restrictions on Iran were lifted under last year’s nuclear accord, some U.S. sanctions remain in place, prohibiting transactions in dollars and keeping large international banks at bay.

The government presented about 60 projects to potential investors in December at an event in Tehran with companies including BASF SE, the world’s largest chemical company by sales.

Iran’s current production capacity is 60 million tons a year, up about a third since the end of the last Iranian year on March 20, when it stood at 46 million tons, Shahdaei said. Sabic, by comparison, produced 69.7 million tons annually as of the end of 2014, according to the Saudi company’s website.

Iran generated $14 billion from petrochemicals produced in the last Iranian year, including $9.4 billion from exports, mostly to China and Europe, Shahdaei said.

A $10 billion credit line from Japan to Iran, announced last month, could facilitate the petrochemicals business, she said. In addition to Mitsui and Total SA, NPC is in talks with several German, Italian and Spanish companies, Shahdaei said, declining to identify them because they haven’t signed memorandums of understanding with Iran.

“Companies that ignored us for years are now getting up and coming here,” she said. “It’s similar to starting a race. They are positioning themselves in the starting blocks so that as soon as the barriers are removed, they can get working.”

(Source: Bloomberg)