The Petrochemical Research and Technology Company subsidiary of Iran’s National Petrochemical Company (NPC) and Germany’s Lurgi have signed a contract for a technology license and basic engineering for a methanol-to-propylene (MTP) plant, to be built in the Petrochemical Special Economic Zone (Petzone) at Bandar Imam. MEES understands that this would be the world’s first commercial plant to incorporate a new process developed by Lurgi, and commercialized with the aid of Norway’s Statoil. The MTP process was designed to help provide an economic route from natural gas via methanol to propylene, for which capacity is increasingly constrained. The plant is envisaged to have capacity in the range 100,000-120,000 tons/year, and would use feedstock from the 1mn t/y 3rd methanol plant at Bandar Imam, brought on-line last summer (MEES, 28 June 2004).

MEESunderstands that, while the contract has been signed, a number of details of the project, including the optimum capacity and feedstock volume requirements, have yet to be finalized. As is usual with NPC projects, the contract will not become ‘live’ until financing is in place. Negotiations with credit agencies banks are understood to be virtually complete, and close of the investment is expected within two months. After that, the provision of technology and basic engineering work will take six months. A report by the National Iranian Oil Company’s (NIOC’s) PIN news service on 7 February estimated the value of the contract at €7.5mn, adding that a tender for detailed engineering, procurement and construction would be opened once the basic engineering was complete.

NPC faces a potential shortage of propylene, normally derived as a by-product of the refining process and to a lesser extent as a secondary production ethylene cracking, as Iran’s refinery expansion plans are dwarfed by its polyolefins expansion program. Iran’s strategic solution is to pursue the commercialization of the MTP and propane dehydrogenization (PDH) processes as part of a move to secure the necessary propylene supplies (MEES, 2 August 2004). MEES understands that the MTP process was designed to help reduce the costs of gas-to-propylene processing, particularly when used in conjunction with Lurgi’s MegaMethanol technology for converting gas to methanol, which is being implemented in two methanol projects under developments at Assaluyeh (MEES, 5 July 2004). By-products of the MTP process are gasoline and LPG.