Iran building third-biggest petchem complex in Mokran

Tahir Ikram



SINGAPORE (ICIS)–Iran is building an $11.9bn petrochemical complex in Mokran that will offer great potential for investors due to its strategic location, with ready access to cheaper gas feedstock, an industry executive told ICIS. 

The Mokran petrochemical complex, located at the south eastern Chabahar coastal area, will be the third-largest petrochemical base in Iran, after Bandar Imam and Asaluyeh.

“We have developed several scenarios in investment, partnership and financing. Foreigners can own up to 100% of the plants or can join Iranian investors as their local partner,” Reza Ebadzadeh, CEO of SPI International Proprietary Ltd (SPII), a subsidiary of SHASTAN, which owns nearly one quarter of petrochemical sector of Iran, said in an email interview.

SHASTAN is the master developer of the Mokran Petrochemical Hub, as well as the owner of three plants plus utility (nine different packages) within the Mokran Area, while SPII is in charge of funding arrangement for SHASTAN’s mega projects.

The Mokran complex is projected to have a total production capacity of 25m tonnes/year, a considerable part of which will be exported and the rest kept for captive domestic downstream use, according to an Iranian government publication.

Mokran Petrochemical Complex consists of four urea-ammonia plants, four methanol-ammonia plants, five methanol plants, two olefin plants, one aromatics plant, one methanol-to-olefin plant and one crystal melamine plant.

It has three sections reserved for construction of additional plants and nine sections reserved for construction of 30 downstream units. The site also offers huge storage, utility and terminal infrastructure. 

“Iran is a player that cannot be ignored in this game. Simply 20% of methanol of the world shall come out of Asaluyeh….strategic location, access to international water, easy access to landlocked markets give us a logistic superiority,” Ebadzadeh said highlighting Mokran projects’ advantages.

“In the new world trends, only countries with outstanding competitive advantages can stay,” Ebadzadeh said.

In 2012, a company called Negin Mokran Development Petrochemical Company (NMPC) was set up under SHASTAN as the master developer of the project. The project’s study, land preparation and acquisition of required licenses started in late 2015.

“Now, negotiations for the utility project have concluded and three contracts have been signed on build-operate-transfer & EPCF [engineering, procurement and construction] basis, Ebadzadeh said.

Construction of the first methanol plant at the site known as Badr-e-Shargh started in 2016. The 1.65m tonne/year plant is expected to come on stream by 2019. 

“For [the] methanol section, license agreement, as well as the EPCF [engineering, procurement, construction and finance] contract has been already signed,” Ebadzadeh said.

“We have also signed an MOU [memorandum of understanding] with a reputable Russian company for EPCF of the pipeline project and I believe the contract will be signed before 21 March,” Ebadzadeh said, referring to the proposed Mokran Gas Transmission Pipeline responsible for providing the feedstock to each plant.

“Three phases have been defined for the upstream projects. The construction started in 2016 and each phase will take three to four years to complete. Downstream projects will be constructed in parallel with or after upstream plants construction based on investors’ policies,” Ebadzadeh said.

The initial phase of the Mokran project will require $5.7bn in investment.

Mokran Project

Investment (in $m)


Phase 1



Phase 2



Phase 3






Most of the projects have been sold out to local investors, according to Ebadzadeh though most of the owners would like to have international partners.

“Petrochemical plants in Mokran may enjoy 10% to 30% discount in gas feedstock price awarded by the government in Chabahar Free Trade-Industrial Zone,” Ebadzadeh said.

“More specific, as the value chain is extended from level one to level three, the discount increases from 10% to 30%,” he added.
Iran is developing Chabahar industrial zone on the northeast coast of Oman Sea outside of the Persian Gulf and is working on developing a deep sea port, railways and airport.

The government offers 20 years of tax and duty exemptions on projects at the Mokran complex, Ebadzadeh said.

He acknowledges concerns about a global oversupply of petrochemicals, in the wake of the shale gas boom in America and new capacities in China. However, he stated that there are solutions to encounter this situation.

“The growth in demand is moving from traditional markets to new markets. We are lowering our dependency to a so-called, monopsony,” he said. 

“Although there are some signs that China is going to have lower economic growth rate, there are many other growing markets… It is not a difficult task to expand our presence in India, Africa, ASEAN & Pakistan. 

“Although it is easier for us to deal with large quantities, today you can knock the door of our office in Germany, and ask only for one truck! It is our main competitive advantage that we have a sound control from A to Z, manufacturing to distribution,” he added.

Interview article by Tahir Ikram


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