Italian firm signs $40m deal with Iran petchem firm

22 December 2017

Italy's Techint Engineering and Construction has signed an agreement with Ardabil Petrochemical Company to provide the technical know-how for the construction of a 500,000-tonne petrochemical unit in northwest Iran, said an official.

The contract, worth €34 million ($40.2 million), was signed between Giorgio Veronesi, Techint's commercial manager, and Bahram Shahsavari, Ardabil Petrochemical Company's head of the board of directors, in Tehran earlier this week, reported the Financial Tribune, citing Nipna.

Shahsavari said that the unit, which is to be completed in 18 months, will convert natural gas to value-added products, namely polypropylene and olefin.

He added that the unit will produce 500,000 tons of petrochemical products per annum, and will also create 10,000 jobs in the region.

Pointing to lengthy talks with the Italian firm since mid-2016, the official said negotiations were mainly centred on completing the value chain and manufacturing polypropylene from low value-added commodities like methanol.

According to Shahsavari, Ardabil complex's core products include base goods such as ethylene and propylene as well as polymer items like high density polyethylene, low linear density, polyethylene, polypropylene and polybutadiene rubber.

This project is part of a megaproject, worth around $1.89 billion, which will see to the processing of natural gas into polypropylene.