Petchem Output at 43mt in Iran
Iran has seen its gas production rise by more than 100 mcm/d, thanks to phases 12, 15&16 and 17&18 of the giant offshore South Pars gas field. Oil experts believe that such big jump in Iran’s gas production could bring about a major development in all sectors, particularly in feedstock supply to petrochemical plants. Some petrochemical plants are not running at full capacity due to shortage of feedstock.
Ali-Mohammad Bosaqzadeh, director of control at National Petrochemical Company, told Iran Petroleum in an interview that Iranian petrochemical plants are set to see their output rise.
He said Iran has produced nearly 40 million tons of petrochemicals since last March, adding that the figure is expected to reach 43 million tons this March.
Bosaqzadeh said 13 million tons of petrochemicals were sold on domestic market, while 13 million tons were exported. He said domestic sale of petrochemicals earned Iran IRR 290,000 billion, while petrochemical exports generated $9 billion in revenue.
Iran sits on 33.6 tcm of gas and the country’s petrochemical industry needs to acquire state-of-the-art technology and finance in order to win foothold in world markets.
According to the latest estimates, Iran needs to attract around $70 billion in finance for its upstream and downstream sectors. Some 30% of this sum is related to downstream industries, particularly polymer and polypropylene.
Bosaqzadeh referred to one of the largest ethylene production plants in the Middle East with an annual production capacity of 2.3 million tons, saying: “Phase 1 of Kavian Petrochemical Plant is already in operation and the second phase is to be commissioned in the near future. Under normal circumstances, launching this phase needs a compressor, a turbine and five furnaces,” he said.
He added that the second phase of this petrochemical plant is predicted to come on-stream in March, as new phases of the South Pars field start production.
Bosaqzadeh said West Ethylene Pipeline is one of the projects of Iran’s petrochemical sector. He added that the first phase of this pipeline, stretching from Assaluyeh to Kermanshah, commissioned more than a year ago.
He said that Bandar Imam Special Zone, Kermanshah Polymer Plant, Ilam and Lorestan petrochemical plants would use ethylene supplied by this pipeline soon.
Bosaqzadeh said the second phase of the pipeline, which runs from Kermanshah to Mahabad, is close to being commissioned as some preparations are now under way. The second phase is 400 kilometers long.
The methane feedstock needed for old and new petrochemical plants in Iran is becoming ready as new phases of South Pars are starting production.
Liquefied natural gas (LNG) or associated gas will be also used to feed petrochemical plants.
Bosaqzadeh also said that new facilities have been launched at Fajr Petrochemical Plant, Nouri Petrochemical Plant, Takht-e Jamshid Petrochemical Plant, Lorestan Petrochemical Plant and Damavand Petrochemical Plant.
Regarding the role of NPC in preventing the sale of raw materials, he said that projects have been envisaged for that purpose in the country.
He said NPC and Ministry of Industry, Mine and Trade are coordinating efforts to activate the downstream chain in order to guarantee the return of capital. “That would help infrastructure projects at petrochemical plants,” he said.
Bosaqzadeh said Iran’s petrochemical production has increased 10% year-on-year.
He said Iranian petrochemical companies are running at 70% of their rated capacity, adding that the percentage is expected to reach 80 percent next calendar year which starts on March 21.
“We are also making efforts to finish overhaul of downstream and upstream sectors at petrochemical plants in the shortest possible time and at good quality,” he said.
Undoubtedly, the most competitive condition for investment in Iran’s petrochemical sector is access to feedstock like natural gas, ethane, naphtha and gas condensate in big volumes and at competitive price.
The capacity of Iran’s refining industries and gas transmission is around 600 mcm/d which would soar to 1,000 mcm/d within the upcoming years.
Iran will have access to sufficient ethane to feed its petrochemical plants and win market toeholds for petrochemical products.
Besides easy access to petrochemical feedstock, Iran enjoys other advantages which should not be ignored. A growing domestic market for petrochemicals, access to skilled manpower, extensive communications infrastructure, sharing border with 15 countries particularly in Central Asia and Caucasus, special economic petrochemical zones, political stability, pro-investment regulations, facilities like tax exemption for investors and an active chain of petrochemical plants are among them. These factors can contribute to the development of downstream and upstream sectors. It would be also possible for investors to seek help from the National Development Fund of Iran (NDFI).