Petrochemical Special Economic Zone

Petrochemical Special Economic Zone

Petrochemical Special Economic Zone, with an area of about 2850 hectares, is located on the northern coast of Persian Gulf in the city of Mahshahr, Bandar Imam district, southwest of Iran.

Due to its natural and geographical location, as well as the legal facilities that it offers, this Zone has been created to further develop the industry and trade of petrochemicals. By attracting new technologies and generating employment opportunities, the Zone also provides economic and social benefits.

From the geographical point of view, the Zone has access to the international waters through Bandar Imam and Khor Mosa Firth. It's also connected to Turkey and Central Asian countries via national railway grid.

This region, which is a part of Khuzestan province, plays a strategic role in Iran's oil and gas industry. Access to oil and gas resources further facilitates the supply of raw materials and feed to industrial units in the Zone.

Petrochemical Special Economic Zone Organization was established, as a subsidiary of the National Petrochemical Company, for the management and realization of industrial and economic development activities in the region, including development of petrochemical industries. Following a decree issued in 1997 by the Supreme Council of Free Trade-Industries Special Economic Zone, the organization began its work in 1998 and invited foreign and domestic investors to invest in this important petrochemical hub.

The goals behind the creation of the Zone:
- Supporting economic activities and expanding the country's trade relations internationally
- Encouraging foreign and local investors to participate in developing Iran's petrochemical industry
- Increasing petrochemical exports and manufactured products as well as boosting mobility in the industry, trade and regional economy
- Enhancing the economic growth and development of Khuzestan province and taking advantage of its potential capabilities
- Creating a suitable platform for boosting Iran's international petrochemical markets, production and processing of goods, increasing non-oil exports, re-exports, transit and transfer of goods (Transshipment)
- Attracting foreign and local investors
- Absorbing know-how and state-of-the-art technologies through scientific and industrial cooperation with international companies
- Supporting domestic industries, craftsmen and creating facilities for them
- Taking practical action to create productive job opportunities and reduce unemployment in the province

Incentives and advantages for investment
- Issuing all relevant permits for investors and economic activists by Petrochemical Special Economic Zone (including permits for construction, operation, production, export, etc.)
- Exemption of customs duties on machinery, equipment and goods entering into the Zone
- Exemption of customs duties on exporting the products made of foreign- origin raw materials, based on calculating their relevant added value
- Full exemption on entering the permitted share of products originally made of local raw materials, to be distributed inside the country
- Full duty exemption on added value tax for intra-zone transactions and contracts
- Exemption of direct tax for 7 years starting from the date of issuing the operation license
- Allocating the lands at expert set price for new investment projects
- Granting 6-12 months grace periods for payment of the allocated lands based on the subject projects' category (upper, middle and downstream)
- Exemption of value added tax on the machineries and equipment entering the Zone from the main land
- Exemption of Customs duties and commercial profit tax on re-export of the goods and equipment which have been changed in the Zone
- Applying no restrictions on transiting goods from the Zone to other Free Trade and Special Economic Zones across the country
- Allocating Iranian Rial and foreign currency resources to petrochemical projects and affiliated industries (under the current regulations)
- Access to feedstock (petrochemical mid & upstream industries)
- Availability of infrastructures, such as: power & gas supply, jetty, railway and airport
- Availability of welfare & medical facilities
- Applying special employment and social security regulations in the Zone

Land Usage
Petrochemical Special Economic Zone consists of 5 sites:
Site 0: With an area of 424.5 hectares, it's allocated in the northern part of the Zone for salt extraction ponds and salt depot
Site 1: This site covers an area of 400.1 hectares and is located in the northern part of the Zone. It's been allocated for development of petrochemical intermediate and downstream industries. Some sections of the site, have been allocated for various functions such as petrochemical downstream industries, chemical industries, department of electricity and electronics, construction, metal, machinery, laboratory and quality control, equipment maintenance units, as well as administrative, services, residential units and commercial booths.
Site 2: Covering an area of 503.9 hectares, this site has been allocated for development of heavy industries as well as upstream and midstream petrochemical units, Fajr No. 2 centralized utility services plant and storage facilities for solid products.
Site 3: Covering an area of 337 hectares, this site is allocated to develop petrochemical upstream, midstream and downstream facilities as well as establishing training and R&T centers, maintenance department of petroleum, gas and petrochemical industries, HSE center as well as an emergency and fire department.
Site 4: With an area of 261.8 hectares, this site has been allocated for the development of mid and upstream petrochemical industries. Fajr No.1 centralized utility services factory is also located in this Zone.
Site No.5: By annexing the lands of Bandar Imam Petrochemical Complex (BIPC), Razi and Farabi complexes, this site covers an area of 694.4 hectares. 7 jetties for loading and unloading chemical products, storage and liquid tanks are included in this site.

Firths: 226.4 hectares

Road transportation
With its access to first-class local and international roads, Petrochemical Special Economic Energy Zone plays an important role in accessing different cities in Khuzestan Province as well as other provinces within the Iranian territory and beyond.

Sea transportation
Petrochemical Special Economic Zone lies adjacent to Bandar Imam Khomeini Port which is equipped with 38 jetties of 37mt/y nominal capacity and is connected to the Persian Gulf through Khoor Mousa Firth. There are also 7 jetties within the Zone with a loading/unloading capacity of 15mt/y.

Air transportation
Located 7km from the Zone, Mahshahr airport enjoys high-quality and standard navigation facilities for local flights. The airport has the required potentials to be expanded in to use for international destinations as well. A 4-band boulevard road with a length of 7km, connects the airport to the Zone. The international airports of Abadan and Ahvaz cities are each at a distance of 100km from Mahshahr airport.

Railway transportation
Trans-Iranian railways network, with two lines from Imam Khomeini port en-route Ahvaz, passes through the western part of the Zone.
Local railway network begins from the southernmost point and stretches to the northernmost point of the Zone connecting a large number of the petrochemical plants as well as factories of the Zone. The railways network is an inexpensive and reliable way of access to not only different parts of Iran but also the neighboring countries such as Turkey, Central Asian Countries and Caucasus.

Since Petrochemical Special Economic Zone is located in the water-rich province of Khuzestan, it therefore has access to available water resources in the area. Water availability is an important prerequisite for developing any major industry.

Due to huge investments that have been made for implementing a water-supply network project in the Zone, for the time being, 350,000 cubic meters of water per 24 hours is being supplied to the Zone by Karoon river and Koot Amir water treatment and supply plant.

Khuzestan Province is one of Iran's oil and gas rich regions. Easy access to the feedstock and raw material for developing petrochemical industries, is one of the significant advantages of this region. At present, 14.4 million cubic meters per day of gas is being supplied by Bid Boland Refinery to meet the fuel and feedstock needs of power plants and petrochemical complexes located in the region.

Major supply of electricity for Sites No. 2, 3 and 4 which is allocated to the semi-light, semi-heavy and heavy industries in large industrial scale and voltage level kv 132 with a production capacity of 1495 megawatts (835 megawatts in phase No.1 and 660 megawatts in phase No.2), is at the disposal of the Fajr Petrochemical Company.
In Site No.1, of which the relevant function is setting up the petrochemical downstream industries and affiliated industrial units, due to the less power consumption of several number of small industries in the region, the Petrochemical Special Economic Zone, is committed directly to supply the power of such units at the level of medium voltage 33kv through national power network.

Weather condition
Located in southwest of Iran and due to proximity to the sea, the weather is tropical and sultry in Mahshahr. The rate of precipitation in the region is less than 250 millimeters per year and maximum precipitation in 24 hours is 45 millimeters.

Residential and medical facilities
With the existence of a great number of petrochemical plants and new projects in the region, appropriate medical, welfare and residential facilities have been provided for the staff living in the area. Hotels, administrative and commercial centers, sport clubs, schools, cultural centers, a well-equipped 200-bed hospital and urban parks are green spaces are among these facilities that are located near the Zone. There are also hospitals, hotels, cinemas, libraries and universities in the port city of Mahshahr.

IT & Communication Unit
The Centralized electronic and communication services Department of Petrochemical Special Economic Zone Organization provides the communication services for petrochemical companies and petrochemical downstream industries active located in the Zone, as well as the high-pressure gas reduction station, Sarbandar waste treatment unit, welfare centers, Mahshahr, Besat towns and access roads in the region.

The IT & Communication Unit also provides an integrated sound and data service consisting of 17 independent telephone centers with a capacity of 13108 lines and 900 input and output channels for local and international contacts and vice versa.

The Unit is also responsible for providing the centralized trunked radio system services for petrochemical companies and plants in the Zone.

Provision of data services including the internet, intranet and intercommunication services for all companies situated in the Zone and their connection to the customs department in order to remove the unnecessary paperwork is among the Unit's other responsibilities.

All communications are being carried out through fiber-optics and copper wires as well as radio links.

Other services such as paging system, fire alarm and UPS are provided for the Petrochemical Special Economic Zone's subsidiary units.

Investment and joint-ventures
Equipped with full knowledge of the fields of macro-economic structure and policy-setting of public and private sectors regarding the development of industries particularly petrochemical sector as well as local and international commercial strategy, customs affairs and with an awareness of the rules and regulations of Free and Special Economic Zones, the Investment Affairs Dept. has provided new opportunities for local and foreign investors such as joint-ventures, and plays an active role in attracting potential investors.

Goals of the Investment Affairs Department
• Attracting the local and foreign investors to invest in Petrochemical Special Economic Zone
• Boosting the share of petrochemical industry in the country's GDP and export of non-oil products in order to minimize the dependence on crude oil revenues and improving the general index of the national economy
• Identifying necessary solutions to support the economic activities of private sector in the Zone and facilitating the international commercial relations
• Assisting the generation of greater added-value through developing products value-chain
• Evaluating and compiling novel solutions and approaches put forward by investors and bringing them to the attention of policy-makers within NPC
• Facilitating the process of investment attraction and promoting the competitive investment opportunities across the Zone
• Integrating and coordinating the entire process of investment attraction as per the government's development strategy
Customs affairs Department
This department is tasked with enforcing the export and import regulations and seeks to fulfil the customs and economic goals of the Zone. Among its other duties are coordinating and managing the legal customs and commercial activities of investors in the Zone, proper safeguarding and control of consignment goods at the Zone's warehouses, controlling the transactions and transportation of goods in the Zone by issuing the warehouse receipt, extracting the customs statistical data, as well as issuing the certificates of origin.

Labor and job Services Unit
The Unit was launched in 2008 to manage and regulate the labor market, supervise the implementation of safety and labor health regulations, insurance and social security and other relevant affairs.

HSE (Health, Safety, Environment and Passive defense)
Health Department

The Department was established in the Zone to promote the staff's health and wellbeing. To this end, in addition to continuous supervision on health indices throughout the region and periodical assessment of the companies, it seeks to improve its performance through equipping the health laboratories, performing quantitative monitoring and analyzing the current risk factors.

Fields of activity:
- Occupational health
- Environment health
- Nutrition
- Health education and training

As part of its commitment to sustainable development and protection of the environment, Petrochemical Special Economic Zone Organization has allocated the qualified manpower and laboratory equipment in a bid to take necessary measures in identifying pollution sources and monitor the pollutants continuously, control emissions. It also analyzes the environmental issues on regular basis. Environment Department monitors on daily basis the air and wastewater of petrochemical plants, processes the laboratory data in order to offer relevant solutions for improving environmental solutions for minimizing contaminants and emissions in the Zone.

Major activities of Environment department are as follows:
- Continuous monitoring and controlling of wastewater as well as water, air, soil and noise pollution
- Supervising the environmental performance of the petrochemical companies
- Identifying, assessing and controlling the environmental problems of plants and factories located in the Zone
- Supervising the management methods of special wastewaters
- Offering analytical reports about the environmental monitoring of petrochemical companies
- Holding regular monthly meeting by representatives of the petrochemical companies and other related organizations in the province regarding the protection and preservation of the environment
- Assessing the needs and planning for the environmental research projects
- Promoting the environmental culture by holding relevant training courses and seminars
- Promoting environmental awareness through activities such as producing brochures and films

Safety and Fire-fighting Department
This department consists of two sections: Safety and Fire-fighting. The safety section has a significant role in preventing work-related incidents by identifying and assessing the hazardous areas, periodic inspection of petrochemical companies in the Zone and offsite feedstock and products lines, as well as educating the staff about work place safety, promoting safety culture and ensuring compliance with safety standards and regulations.

The personnel of fire-fighting section offer the services required by the petrochemical companies and projects in the Zone. At present, this section operates three fire-fighting stations (including the central station and two sub-stations), modern fire-fighting trucks and vehicles plus highly skilled manpower, which has made this section into a unique fire-fighting service provider nation-wide.

In order to empower its personnel and mangers in the relevant specialty fields, this department has built and equipped a unique Fire Ground center in which most of the modern techniques and methods of firefighting and tackling flammable and toxic substance emissions are taught to the staff of the Zone and other interested persons as well.

Passive Defense and Crisis Management
This department is tasked with monitoring potential hazards, identifying areas that are prone to risk factors, increasing the efficacy of deterrence measures and the level of preventability, organizing tailor-made drills based on scenarios that are relevant to the situation of the Zone. It's also responsible to examine the passive defense of newly-established companies and scrutinize the compliance of these companies with the respective passive defense requirements.

Municipality of the Petrochemical Special Economic Zone is responsible for providing urban services, developing and maintaining green spaces, street furniture, maintaining and repairing the roads, traffic control, handling the companies' application for construction permits, issuing drilling permits, developing welfare and public services, controlling traffic loads and ultimately increasing the satisfaction level of staff and companies located in the Zone.

It should be mentioned that up to now, 101 hectares of green space areas have been developed in the Zone as well as more than 11 million saplings of mangrove trees have been planted in the adjacent firths in the region.

The huge volumes of local and foreign investment in the petrochemical field, has turned this region into a strategic and an important center in Iran's economy. The Zone's senior security officials pay special attention to the security of the Zone. To this end, they have recruited experienced and committed personnel and are utilizing the most advanced electronic devices to protect the staff, facilities, assets and sustainable production.

Cooperation with judiciary, disciplinary and military bodies in the region and close relations with upstream sections of the petrochemical industry and Ministry of Petroleum, have properly paved the ground for ensuring investors that their assets will be safeguarded. Interaction with the security managers of companies in the Zone, enables this department to play a key role in managing and controlling any possible crisis in the region.

Grooming plan for attracting younger generation of experts and managers, focusing on scientific performance and encouraging the security personnel to maintain their physical and mental preparedness, is another responsibility of the security department.

Engineering studies of Petrochemical Special Economic Zone expansion project
Aims of expansion project

• Creating further added-value by developing the petrochemical midstream and downstream industries
• Utilizing the availability of giant petrochemical industries in the region
• Putting to use the advantages of independent gaseous fields
• Possibility of supplying the required feedstock by petrochemical upstream industries
• Potentiality of marine, air and land terminals (road, railway) in the region
• Primary infrastructures required for the industries established in the previous year's planning
• Benefiting from the jetties located in Majiidieh, Bandar Imam and ...
• Current sovereign, economic and industrial position of Petrochemical Special Economic Organization in the province
• Shortage of lands for new projects
• Importance of petrochemical downstream industries in the region
• Accountability to the social needs of the region and job creation
Important and effective documentation in projects implementation
• The authorization issued by Board of Directors of Petrochemical Special Economic Zone on the implementation of expansion projects in the region
• The authorization issued by NPC Board of Directors on the implementation of expansion projects in the region
• The Regulations of establishing Special Economic Zones, (Secretariat Office of Cooperation Council of Free Trade-industrial and Special Economic Zones)

• Cooperation with the HSE of NPC
• Cooperation with the Directorate of Planning and Development of NPC
• Cooperation with the Projects Directorate of NPC
• Investigating the different fields of lands and choosing the required lands
• Taking necessary action to obtain different inquiries from organizations and departments of the province through the Trade, Industry and Mine Organization of Khuzestan province
• Inquiries follow up