The CEO of Petrofarhang announced the holding company’s approach to financing Sabalan Petrochemical through today’s initial offering of the company’s standard parallel salam contract for methanol.
According to the Public Relations and Brand Development Department of Petrofarhang Holding, the CEO said: Sabalan Petrochemical, a subsidiary of Petrofarhang Holding and Sepehr Energy Company, will today, Monday, 12 Mordad, host the initial offering of its standard parallel salam methanol contract on the Iran Energy Exchange. The offering will be conducted through a discontinuous auction and marks a turning point in the company’s financial strategy.
Seyed Mohammad Hashemi Kia added: Prior to this offering, Sabalan’s 10,000-ton methanol warehouse had already been accepted on the Iran Energy Exchange. That acceptance provided the infrastructure required for physical delivery and the standardization of trades, and paved the way for the use of modern trading instruments. Under a standard parallel salam contract, the producer raises the liquidity it needs against the backing of its product. At the same time, the instrument gives investors an opportunity to enter a commodity market with a real underlying asset and, if they wish, to trade the contract in the secondary market.
He further stated: This instrument is a positive step toward securing liquidity and minimizing financial risk within the company. It also diversifies financing methods, increases transaction transparency, and makes it easier for domestic producers to access the product—an issue of particular importance for export-oriented industries under the country’s current economic conditions.
He concluded: Sabalan Petrochemical currently has an annual production capacity of 1,650,000 tons of AA-grade methanol in Phase 1 and is on the verge of commissioning Phase 2 with the same capacity. With a combined annual capacity of 3,300,000 tons, it will be one of the largest producers of this product in the Middle East.