According to the Public Relations of the National Development Fund, Seyyed Alireza Mirmohammad Sadeghi, regarding the "Law on Supporting the Development of Downstream Industries of Crude Oil and Gas Condensates through People's Investment," stated: This law was approved by the Islamic Consultative Assembly on August 18, 2019, and received final approval through an amendment on May 25, 2021. The aim of this law is to create plans for petrochemical facilities using propane or butane as feedstock, as well as establishing Refinery and Petro-Refinery facilities with the provision of respiration for crude oil or gas condensates.
He further added: The provision of feedstock respiration by the National Development Fund means that from the beginning of operation, this feedstock is made available to the plan's executor as a facility. In essence, the plan is constructed with the executor's capital, but upon reaching 80% of production capacity, it can benefit from this law and receive feedstock from the resources of the Fund and after exporting the product, the amount is returned to the Fund.
The importance of complying with the legal conditions for accessing the Fund's facilities in feedstock respiration for Petro-Refinery:
Seyyed Alireza Mirmohammad Sadeghi, emphasizing the importance of complying with certain legal conditions to access the Fund's facilities, explained: According to Article 3, Clause (a) of the "Law on Supporting the Development of Downstream Industries of Crude Oil and Gas Condensates through People's Investment," the utilization of the National Development Fund's share within the framework of relevant laws and regulations is only possible with the permission of the esteemed Supreme Leader's office. On the other hand, in Clause (b), Article 1 of the mentioned law, it is defined as follows: The issued permit is in accordance with Section 4, Clause (p) of Article 3 of the "Law on Duties and Authorities of the Ministry of Petroleum," which evaluates and issues permits based on the design, technical and economic proposal and the specifications of the produced products by the Ministry of Petroleum. It includes the quantity of feedstock and the amount of feedstock respiration, and it falls under the responsibilities of the Ministry of Petroleum.
He further stated: Furthermore, in Article 3 of this law, it is emphasized that the government is obligated, through the Ministry of Petroleum, to issue and review permits for plans up to a maximum of 2 million barrels per day and grant feedstock respiration from non-governmental sector investments, in accordance with the obligations of this law, to support the attraction of public investments.
The board member and banking and credit deputy of the National Development Fund, while emphasizing the 80% progress in production capacity of the plans, added: In addition to this, the plans should be introduced to the participating banks by the Ministry of Petroleum, and the necessary documents and guarantees should be obtained from the banks and based on that, the Fund will provide feedstock respiration facilities to the production units. Seyyed Alireza Mirmohammad Sadeghi continued: Furthermore, in Article 16 of the Implementing Regulation of the law approved on January 8, 2020, by the Council of Ministers, and its amendment on December 29, 2021, it is mentioned that the total acceptable value of feedstock respiration for the Fund during the period of plan feedstock respiration in future years is within the Fund's share, up to a maximum of 2 million barrels per day, according to the timeline specified in the table which should be submitted to the Board of Trustees of the Fund within 2 months from the date of proposal by the Fund and in accordance with Clause (a) of Article 3 of the law for approval, while considering the provided conditions.
The Ministry of Petroleum is responsible for issuing permits for Petro-Refinery plans to receive feedstock respiration
He explained that according to Article 24 of the Implementing Regulations of the "Support for the Development of Downstream Industries of Crude Oil and Gas Condensate Using Public Capital" law, the feedstock respiration period begins with the start of production in the Refinery/ Petro-Refinery with a minimum of 80% processing capacity as specified in the plan’s license but it appears that no project has successfully progressed to the stage of obtaining approval from the Ministry of Petroleum and receiving securing bank guarantees. The member of the Board of Directors of the National Development Fund stated that the Ministry of Petroleum is responsible for issuing plan licenses for feedstock respiration, and the Fund, in accordance with its obligations in the Board of Trustees meetings, has approved the annual commitment ceiling. Besides, he mentioned: The National Development Fund is prepared to implement the feedstock respiration law and deliver 200,000 barrels of oil daily in the year 1403 (2024-2025) and all necessary mechanisms and procedures for its execution have also been provided but according to the process of providing facilities by the National Development Fund, after approval from the Ministry of Petroleum and necessary coordination between the applicant company and the respective bank, including due diligence, the plan will be submitted to the Fund for utilizing the feedstock respiration law.
He explained regarding the necessity of obtaining permission from the esteemed Leader's office for granting feedstock respiration to petrochemical refineries: This matter has not been explicitly confirmed in the legal documents and records of the National Development Fund. However, correspondences are currently being conducted by the President's office to obtain the Leader's permission.
A member of the Board of Directors and banking and credit deputy of the National Development Fund emphasized: The Fund is fully prepared to implement the law on supporting the development of downstream industries of crude oil and gas condensate using public capital and providing feedstock respiration to refineries and Petro-Refinery in accordance with the law.