Iran to build first MTO plant, to integrate with new methanol plant at Mokran: SPII CEO

By February 2, 2017August 17th, 2018Iran Methanol

Singapore (Platts)–2 Feb 2017 230 am EST/730 GMT

Iran plans to build its first methanol-to-olefin plant, at the Badr-e-Shargh Petrochemical facility which is part of the mega Mokran Petrochemical Complex at Chabahar, following the completion of a new 1.65 million mt/year methanol plant at the same site in September 2019, SPII CEO Reza Ebadzadeh (in photo) said early this week.

SPI International, or SPII, is the company managing the finance and engineering contracts for the Mokran petrochemical project. It will also be handling the eventual international sales of petrochemicals from the complex.

The decision to build an integrated MTO plant rather than a standalone methanol plant was based on higher profit expectations, Ebadzadeh said in an interview with S&P Global Platts Sunday.

The move up the value chain by upstream producers is an industry-wide phenomenon which accelerated after the 2014 crude oil crash, industry sources noted.

Saudi Arabia’s Sadara Chemical Company, a joint venture between Saudi Aramco and The Dow Chemical Company, is another example of this trend.

The proposed 1.25 million mt/year Badr-e-Shargh MTO plant will produce 60% propylene and 40% ethylene, according to data provided by SPII.

Downstream of the MTO plant will be a 600,000 mt/year ethylene oxide plant, a 450,000 mt/year polypropylene plant and a 150,000 mt/year oxo- alcohols plant.

Other downstream plants include those that produce ethoxylate, acetic acid, propylene oxide and butyl acylate, according to the data.

Since the Badr-e-Shargh facility is expected to cover less than half of the feedstock methanol required by its integrated MTO plant, the balance will be sourced locally from Mokran as well as Assaluyeh further afield, Ebadzadeh said.


Future plants at the Mokran complex that will produce methanol and other petrochemicals will source natural gas from the gas-rich South Pars fields at Assaluyeh, Ebadzadeh said.

Plans to connect Assaluyeh to the Mokran Petrochemical Complex at Chabahar is proceeding, with Iran’s Ministry of Petroleum recently announcing that 30 million mt/day of natural gas will be allocated to the first phase of the Mokran complex, he added.

“The IGAT7 pipeline will feed Chabahar,” Ebadzadeh said. The Assaluyeh to Iranshahr leg of the 56-inch natural gas pipeline was completed in 2010.

“From Iranshahr to Chabahar, pipeline construction was re-tendered by the NIGC [National Iranian Gas Company] in July 2016,” he said, adding that this extension of the IGAT7 pipeline was awarded to the Mokran Gas Transmission Pipeline Company with construction expected to begin in Q1 2017.


The main stumbling block for the Badr-e-Shargh project and the wider Mokran petrochemical complex is not technology, but financing, Ebadzadeh said.

“It is our wish is to attract as much [foreign direct investment] as possible, and honestly it has not yet started very seriously and meaningfully,” he said, adding that domestic financing is possible, but interest rates are “very” high.

“But we are talking with a handful of companies [including] European, Indian, Chinese and some expatriate Iranian [investors],” Ebadzadeh said.

Although sanctions on Iran were lifted by the US and the EU following a deal reached in January 2016, business challenges have emerged after the election of US President Donald Trump, industry sources said.

“I am not aware of [specific] policies of the new White House administration, however, it is appreciated globally that Iran is moving as per JCPOA,” Ebadzadeh said, noting an increased number of meetings with international companies including the US late last year.

Under the Joint Comprehensive Plan of Action, JCPOA, the US lifted its sanctions on Iran’s oil sector in exchange for Tehran’s agreement to dismantle the vast majority of its nuclear program.

Trump, a vocal opponent of the Iran nuclear deal, signed an executive order on January 27 barring citizens from seven Muslim-majority countries including Iran from entering the US for the next 90 days. White House officials said an even broader ban is in the works.


In addition to the Badr-e-Shargh MTO plant, the Mokran Petrochemical Complex will feature two olefin plants, one aromatic plant, one crystal melamine plant and up to eight ammonia production plants, along with utilities and terminal infrastructure.

Final downstream plant configurations are not finalized, but is expected to include as many as 30 plants, according to SPII.

SPII is a subsidiary of Shastan, which has interests in Iranian cement and mining companies, and is the owner of one quarter the Iranian petrochemical sector on a production tonnage basis, according to the company.

–Yi-Jeng Huang,

–Edited by Geetha Narayanasamy,