Iran says an agreement has been signed with Japan’s Itochu to fund one of its key petrochemical projects – the second such agreement signed with Japanese companies over the past few months.
The agreement was signed between Persian Gulf Petrochemical Industries Company (PGPIC) and Itochu. It envisages providing as much as €320 million for the development of PGPIC’s petrochemical projects, IRNA reported.
This will be carried out through a mechanism known as the Usance Letter of Credit (L/C), added the report.
The PGPIC signed the first such agreement with the same specifications with Japan’s Marubeni earlier in September.
The company had earlier announced that it has devised serious plans to attract funds for its petrochemical projects through a series of agreements that include Usance deferred payment and short-term finance schemes.
Talks to the same effect are currently underway with several European companies including some major German enterprises, added IRNA.
The PGPIC plans to attract a total of $12 billion in investments by German companies, added the report.
Last week, Bloomberg quoted a company official as saying that talks have started with an Italian enterprise to invest in the PGPIC. The official did not name the company but said the planned investment will be made in a methanol project in Assaluyeh energy hub in southern Iran.
The petrochemical industry is the biggest source of foreign earnings for Iran after oil. Last year, Iranian companies exported about $12.8 billion of petrochemical products.
Iran has significantly expanded the range and volume of its petrochemical products over the past few years. The country has become the second largest producer and exporter of petrochemicals in the Middle East after Saudi Arabia.
Iran currently produces 60 million tons of petrochemicals a year. This capacity will increase by 8.5 million tons by March 2017 when a number of new projects become operational.