As this zone is based on the South Pars gas field, its main industries are gas refineries. Therefore, based on the feedstock they supply, petrochemical projects have been defined and account for a significant share of the petrochemical feedstock. Khosrow Afrouzeh, deputy head of planning and economic development at PSEEZ, has said that about 73% of the national gas supply comes from this gas area.
As these products supply the bulk of refineries’ feedstock, 25 petrochemical plants with a nominal capacity of 40 mt/y offer 51 products. According to the latest figures, total hard currency revenue from free and special zones, in the last calendar year, reached $18 billion, $12.3 billion of which came from PSEEZ. In addition to 25 production units, 38 licenses have been issued for investment in petrochemical projects for an annual output capacity of 43 million tonnes, which are expected to come online over five years.
Facilitating Investment
Projects underway and production units show that PSEEZ accounts for over 50% of national petrochemical production capacity, generating significant foreign currency income.
“Investors are aware of potentialities in this zone and are willing to invest there. We are responsible for facilitating conditions and processes of investment for their entry,” said Afrouzeh.
Noting that the main mission of PSEEZ is to attract investment for development of downstream industries, he said: “Enhancing the efficiency and effectiveness of management of financial resources and attracting investment for income generation, profitability and value-added generation at the regional level and supplying needs of key stakeholders and customers are among other missions assigned to PSEEZ, which would finally boost production and job creation in the region.”
Referring to measures undertaken to facilitate investment, he said: “In light of the big industrial potential created in the gas and petrochemical industry in this zone, the most significant objective of the Directorate is to facilitate the process of investment for regional development. One of the main divisions of the Directorate pertains to studying investment opportunities. In fact, in partnership with other sections of this Division, a preliminary study is done, and investment packages are offered. That includes information about the zone, varieties of feedstock, infrastructure, activities, and logistics available there for investors.”
Equal Support for Investors
The special position of this zone is, by itself, attractive to investors; potentialities such as access to feedstock at an attractive price, proximity to ports, and the Persian Gulf. Therefore, investment in downstream projects would boost job creation there.
Afrouzeh said the Directorate under his supervision is also studying other investment projects. Regarding the mechanism for investors’ endorsement of development projects, he said: “Investors present projects based on regional conditions and needs, while the PSEEZ Directorate of Planning and Economic Development conducts studies for obtaining a license. These studies result in signing agreements and allotment of land for projects. Through this process, the Directorate is working with investors to facilitate their activities.”
Rather than being limited to domestic applicants, it is extended to take care of foreign investors, too. In 2002, Iran adopted the Foreign Investment Promotion and Protection Act (FIPPA), based on which PSEEZ supports development projects and foreign investment.
On the allotment of land to foreign investors for development projects, Afrouzeh said: “The founder of the company established in Iran is required to be an Iranian national, but foreign investors can be among shareholders. Therefore, a foreign investor is required to be an Iranian company in order to present its projects in Iran and sign an agreement with the Iranian government and acquire land, but with 100% foreign shareholding. That would facilitate the process of investment in Iran.”
Investment Incentives
One of the main requirements for investing in the oil, gas, and petrochemical sectors is easy access to land and feedstock for implementing these projects. Afrouzeh said: “Investors and owners of development projects need financial resources and required infrastructure for their projects. Fortunately, the infrastructure is available in the zone, which includes access roads, ports, an airport, land, and utilities.”
Noting that a major incentive is to facilitate and shorten the process of acquisition of license for the projects, he said: “Before having access to this infrastructure and licenses, the process was time-consuming, but thanks to NIOC support and follow-up by the CEO of PSEEZ, more authority has been granted to this Directorate to facilitate and shorten the process.”
The fact is that investors need to deal with a single entity, and they are no longer accountable to other organizations. PSEEZ issues most licenses itself. Should investment documents be ready, allotment of land would take place within two months. The other issue is customs exemption. When ongoing projects reach production, they would be exempt from customs duties for 10-13 years.”
Small-Scale Investment Packages
PSEEZ has always welcomed foreign investors. Even today, despite all restrictions, local investment has flown into this zone. According to last year’s reports, about $1.5 billion worth of projects underway in this zone came from local investments.
The other key issue is the private sector’s engagement, which has grown in recent years due to decision-making for small-scale projects valued at $30-40 million. Afrouzeh said the bulk of projects pertain to the petrochemical industry, with output being polymer or chemical products. Building such capacity would be attractive to local investors, too. On the other hand, once international restrictions have been removed, enhanced security and stable economic factors would provide potential for introducing the capacities of this zone. Despite all current conditions, this zone remains attractive to investors.
Speaking about the most important plan by PSEEZ for the current calendar year, he said: “We’re trying to expand our communications with investors more than ever and shorten the process of awarding projects. On the external side, some communications have taken shape, and we have expressed our willingness to other countries, particularly the Persian Gulf littoral states, through the Ministry of Foreign Affairs. We have presented several projects to push local investors toward them. We intend to use their potential and capabilities.”
PSEEZ is at the heart of gas production in Iran, in addition to offering a valuable chain ranging from refineries to petrochemical plants and providing the ground for wealth and value generation. Smart incentives, available infrastructure, and facilitating the process of investment have transformed this zone into an ideal destination for investors who seek reliable efficiency and partnership in sustainable industrial development. It is high time to benefit from the numerous opportunities this dynamic hub is offering.
Your Comment