Seyed Mohammad Khatami is going to Mahshahr to inaugurate the third methanol plan of Fanavaran Petrochemical Plant, Fajr petrochemical unit Khuzestan Petrochemical Complex and MTBE plan of Bandar Imam Petrochemical Complex. Although the plans have already been completed and come on stream, due to the importance of petrochemical activities in Mahshahr officials concerned preferred to postpone their formal inauguration until the time of President Khatami's visit to the region. The president's second term in office will end in the early months of next year but until them he is to inaugurate a number of projects launched in early days of his presidency in 1997. Mahshahr is one of the country's industrial poles. From 1974 to 1989 In 1974, Japanese engineers reached an agreement with the then officials of Iranian Oil Ministry on establishment of a complex for production of petrochemical products. It was agreed that a series of petrochemical plants be set up in a place located 84 kilometers east of the southern port city of Abadan. Executive operations of main units started in 1976 but one month after the victory of the Islamic Revolution in March 1978 all operations came to a halt. During the two periods, the Japanese had managed to complete 73 percent of construction work. In early 1979, lengthy negotiations were held with the Japanese side to encourage them to return to Iran but flames of war (imposed by Iraq) engulfed the entire parts of south Iran. In September 1980, Japanese contractors left Iran and the complex designed to produce petrochemical products was closed until the end of the imposed war. With the signing of U.N. resolution 598 (by Iran and Iraq for establishment of a truce), the National Petrochemical Company called on its Japanese partners to sit at the negotiating table. Subsequently, seven rounds of negotiations were held but to no avail and Iran and Japan both agreed in 1989 to nullify their agreement on establishment of Bandar Imam Petrochemical Complex. The National Petrochemical Company took possession of all shares of the project and the Japanese side paid one billion dollars in compensation. Thus the Iran-Japan Petrochemical Company (IJPC) was renamed as Bandar Imam Petrochemical Company (BIPC). It was not the first time that a project had been left unfinished by Japan, a country whose diplomacy according to political analysts is partly dependent on the behavior of the United States. Japan left the refinery of Bandar Abbas project unfinished following the triumph of the Islamic Revolution so that its completion could be entrusted to domestic engineers. On the early days of March 2002, the Japanese again sat at the negotiating table with Iranian oil officials and signed a contract for the development of Iran's oil field (Azadegan), the contract being already postponed for several times under U.S. pressures. Though the Japanese left the Bandar Imam Petrochemical Complex unfinished 24 years ago, its plans have all been completed by efficient Iranian engineers. In his trip to Mahshahr, Khatami will inaugurate the MTBE plan of the complex. A Material For Reduction of Petrol Imports MTBE is a chemical substance that is added to petrol in order to eliminate carbon dioxide from the process of petrol production. With the inauguration of MTBE project, the import of petrol will be cut down by 500 million litters annually. The MTBE unit of the Bandar Imam Petrochemical Complex is to have an annual output of 500,000 tons which will be offered to oil refineries throughout the country. This substance will also help remove the dangerous and poisonous tetraethyl from the consumed petrol. Commenting on the cost of the project, manager in charge of commissioning the MTBE plan says: "Some 142 million dollars plus 352 billion rials have been spent on the implementation of the project. Except a 118 million dollar finance provided by the Spanish government, the rest of expenses have come from the National Petrochemical Company's incomes in both foreign exchange and national currency." The commissioning of the MTBE unit not only will reduce petrol imports by 500 million litters per year but will also put an end to the import of lead derivatives. "From now on, we will no longer need to import 50 million dollars worth of lead derivatives annually." With the addition of MTBE to petrol, the pollution rate of this kind of fuel will decrease. On the observance of necessary standards in the implementation of the project, Ali Reza Sadafi-zadeh says: "The license of this plan belongs to the famous American company UPO." But it is not the end of the story. Officials in charge of the project reached an agreement with the company's branch office in Britain on basic designing of the plan but with the start of the U.S. imposed sanctions on Iran, the agreement was suspended unilaterally. "It was decided that despite the suspension of the suspension, engineering and logistical operations of the project be ceded for the first time to the Petrochemical Industries Design and Engineering Company." According to the project manager, the tentative production of the MTBE project began in 2002 and since March 2004 the unit has reached 92 percent of its nominal annual production capacity of 500,000 tons. "The price of MTBE is between 350 and 400 dollars per ton at present." the feedstock of the MTBE plan is methanol. Methanol is among the products of Fanavaran Petrochemical Complex which is among the plans to be inaugurated by President Khatami during his upcoming visit to Mahshahr. Methanol in Fanavaran Petrochemical Complex In a video clip shown to introduce the Fanavaran Petrochemical Complex, it was announced that the third methanol plan of the complex was launched in 1999 while a brochure distributed among reporters cited the start of construction work on the project as June 2001. Jalil Ebrahim-pour, the managing director of Fanavaran Petrochemical Complex told Persian daily Sharq: "Apparently, opening letter of credit has prolonged the time for implementation of the project from 44 months to 54 months. The third methanol plan with an annual production capacity of one million tons was implemented at a cost of 128 million dollars plus 456 billion rials. At present, the third methanol plan is operating at 85 percent of its nominal capacity." Of one million tons of methanol to be produced, 178,000 tons will be allocated to the production of MTBE and 82,000 tons to production of acetic acid inside the country. Another 740,000 tons will be exported to South East Asian countries such as China and India. The managing director of the Fanavaran Petrochemical Complex said that methanol now being produced has been sold in advance for the next five years, adding "Given the rise in the price of methanol on world markets to 250 dollars per ton, the investments made in the project are expected to be recovered in the next three to four years." Apart from methanol, the Fanavaran Petrochemical Complex also produces acetic acid, carbon monoxide and vinyl acetate monomer. "Investments in all projects of the company amount to 310 million dollars plus 820 billion rials, 15 percent of which was provided by the National Petrochemical Company and the rest in the form of foreign finance by Italy, France, and Britain." The most important application of methanol is in paint, pharmaceutical and resin producing industries and for production of formaldehyde, acetic acid and raw material for production of MTBE. This product has already been produced by Kharg and Shiraz petrochemical complexes. "49 percent of the shares of the Fanavaran Petrochemical Complex belong to the Social Security Organization and Oil Industry Retirement Fund." Fajr Petrochemical Complex and Rendering Peripheral Services The petrochemical projects of Mahshahr need peripheral services such as electricity, water and so on. All these services are rendered by Fajr Complex that is mistakenly called petrochemical complex. This company meets the peripheral needs of other companies. "In order to meet the needs of the companies located at the Mahshahr Special Petrochemical Zone, Fajr company produces 585 megawatts of electricity, 830 tons of steam, 500 normal cubic meters of servicing air, 15,000 normal cubic meters of precision instrument air, 19,000 cubic meters of oxygen and 18,000 normal cubic meters of nitrogen per hour." The managing director of Fajr complex said that the company has been meeting all the needs of 13 firms based in the special petrochemical zone since 2003. He added "This company has been set up with a total investments of 310 million dollars provided through finance scheme plus 1,000 billion rials." All human and industrial wastes in the Mahshahr Special Petrochemical Zone are treated at the Fajr Petrochemical. Massoud Etemadi added, "The treated wastes are used in green areas. Those wastes that cannot be treated are burnt in order to prevent environmental pollution according to world standards. At present we are about to receive ISO 14001 certificate for our efforts to protect the environment." Given the existence of Fajr company (Fajr Petrochemical Company), investors will have no problems in acquiring their needed basic facilities and infrastructures. Khatami is to inaugurate the petrochemical projects of Mahshahr on the first day of summer at a time by then the fate of the Fourth Five Year Economic Development Plan will probably have been clarified by the Expediency Council or the Majlis (Iranian parliament) so that the president can inaugurate economic projects one after another. (Source: Sharq daily, Saturday, June 12, 2004)