It is the first petrochemical project whose agreement was signed between Iran and a foreign company since the implementation of Iran's landmark nuclear deal with six world powers, dubbed the Joint Comprehensive Plan of Action (JCPOA).
Versalis, the chemical arm of Italy's energy group Eni, and Italy's Tecnimont had provided the Iranian party with all necessary documents for the construction of the petrochemical plant under a 14.7-million-euro deal, said Samad Kargar, CEO of Sadaf Petrochemical Plant.
'The petrochemical plant which has an SBR unit with a capacity of 136,000 tonnes a year has been designed by using the technology of Versalis and the engineering of Tecnimont of Italy', Kargar told Iran Petroleum in an interview.
'The project, which has registered a 37% physical progress, is under construction on 8.1 ha of land at Styrene Park of Assaluyeh. Due to being located at Styrene Park, the project requires less infrastructure costs ', he added.
'Given the 8-year history of development of Sadaf Petrochemical Plant, we hope to be able to accelerate the pace of the project,' he said.
Kargar said more than 102 million euros had been borrowed from the National Development Fund of Iran (NDFI) with Tose'eh Tavon Bank serving as agent bank.
He added that the project, which has been operated by the Persian Gulf Petrochemical Industries Company, was also in the process of attracting Japanese usance.
Kargar said talks were under way for launching a latex production line during the phase of development.
'Sadaf Petrochemical Plant receives butadiene and styrene from Jam and Pars petrochemical plants for conversion to synthetic rubber. Before this product is achieved we witness the production of latex,' he said.
'We took the initiative to hold talks with Latex Co. for location so that the feedstock for this material would reach 50% and be usable in more products.'
'The Sadaf petrochemical project entered the operating phase in 2013, and in case it could attract IRR 5,000 billion plus 187 million euros over 26 months, it would be completed,' he said.
Kargar said more than 98% of the project is owned by the Iranian Investment Petrochemical Group Company, adding that Persian Gulf Petrochemical Industries Company had a 67% share in the project.
He said that 83,000 tonnes of butadiene and 45,000 tonnes of styrene would be annually needed for 136,000 tonnes of products a year at Sadaf Petrochemical Plant, adding that Sadaf products would be mainly used in tire and rubber manufacturing industries.
Kargar said the synthetic rubber production capacity in Iran stood at 75,000 tonnes, which is expected to reach 125,000 tonnes in coming years.
'The surplus production of Sadaf Petchem Plant is planned to be exported to China and India because for instance India annually needs more than 200,000 tonnes of this product, while its current output stands below 18,000 tonnes,' he added.
Kargar said the rate of return on investment in this project would be more than 18.4%, adding: 'We have always tried our best to cut costs and diversity products in a bid to increase the margins of investment in this project.'
He said that the JCPOA implementation had removed hurdles to the granting of Italian licenses.
'Currently qualified Iranian companies are involved in this project. Based on the current plans and instructions in effect at the Persian Gulf Petrochemical Industries Company, we are required to supply our commodity and equipment domestically. For instance, we have used chillers and cooling systems developed by domestic manufacturers,' he said. 'Meantime an agreement has been signed with Petrochemical Commercial Company which is a leading entity in domestic manufacturing of equipment. The knowhow and capacity of domestic manufacturers will be used as much as possible.'
Kargar said Sadaf project would face no problems with regard to feedstock. 'Since the Persian Gulf Petrochemical Industries Company has agreements with the major suppliers of feedstock to this petrochemical plant it seems that we will face no specific problem with feedstock supply.'
He said synthetic rubber production has started in the world since World War II (WWII), adding: 'Since we use Italian technology to obtain this product at Sadaf Petchem Plant, we are hopeful to export this product to Europe because we comply with all Europe-recognized standards in our production line.'
Kargar said around 300 people had been hired at Sadaf Petrochemical Plant regularly, adding that the figure trebles under certain circumstances.
'Once this project has been launched, direct job creation at this petrochemical plant will reach 500. Meantime, by launching this project in compliance with the European standards a major change will happen in Iran's rubber manufacturing industry,' he said.
Kargar said the average age at the Sadaf project was 35 years, adding: 'Our main source of hope in this project is the high capacity and motivation of workforce.'
Source: Iran Petroleum monthly, affiliated to Ministry of Petroleum