Chinese Government provides RMB 4.112 billion loan for Masjed Soleiman Petrochemical Complex Construction Project (Linked to Project ID#41429)

On November 16, 2014, the Chinese Government provided an RMB 4.112 billion ($624 million) loan to Masjed Soleyman Petrochemical Industries Co. (MISPI) — a state-owned Iranian company — for the Masjed Soleiman Petrochemical Complex Construction Project. The proceeds of the loan were to be used by the borrower to finance an EPC contract that was issued to a consortium of firms consisting of Switzerland’s Casale SA, Japan’s Toyo Engineering Corporation, China’s Wuhan Petrochemical, and Iran’s Petrochemical Industries Design and Engineering Company (PIDEC). The purpose of the project was to construct a petrochemical plant that is capable of 660,000 tons per year of ammonia and 1,073 tons per year of urea. The plant is to be fed by 861 million cubic meters per year of natural gas (extracted from the Zilayee gas field). The plant is located on a 400-hectare plot of land in the Zeilai (Zilayee) area within the city of Masjed Soleiman and Khuzestan Province. It is adjacent to Lali Road (Haft Shahidan area) and 11.5 km south of Karun River. Construction began in 2014 and the originally anticipated project implementation end date was July 16, 2019. As of May 2018, the project had achieved a 75% completion rate. Subsequent reporting indicates that the project eventually reached a 94% completion rate and it was expected to achieve completion in February 2021.

Additional details

1. The Persian project title is مجتمع پتروشیمی مسجد سلیمان or مجتمع پتروشیمی مسجد سلیمان . 2. Sinopec Corp. Wuhan Company (abbreviated “Wuhan Company'') and Sinopec Assets Management Co., Ltd. Wuhan Branch (abbreviated “Wuhan Assets Company'') are collectively called Wuhan Petrochemical. It is a large state-owned enterprise directly subordinate to Sinopec Group. Its predecessor is Wuhan Petrochemical Works, founded in 1971. 3. The loan that supported this project was very likely drawn from the line of credit captured in Project ID#41429 or the line of credit captured in Project ID#41501. 4. The financier of this project is unknown. However, around the time that this project was financed, China reportedly owed Iran over $20 billion in oil payments. This funding was frozen in overseas banks after US-led sanctions made it difficult for Beijing to transfer money to Tehran. Iran and China reportedly reached a deal to settle some parts of the frozen money through China’s funding of Iranian petrochemical projects. Also, in 2017, a Vice President of China Eximbank reported (see "China’s EXIM Inks $1.5 bn High-Speed Rail Deal with Iran") that it had financed 26 electricity, petrochemical, oil and gas and nonferrous metal projects in Iran worth $9 billion. Therefore, China Eximbank is the most likely funder of this project.

Number of official sources

3

Number of total sources

21