Huge Investment in Kurdish-Populated Areas
Plans envisaged under Iran’s Vision Plan indicate that petrochemical industry has been chosen as an option for the country to reduce crude oil and natural gas sales in the coming decades. As a value-generating industry, the petrochemical sector has been through a growing trend and today one of the major petrochemical projects heavily banked in on is West Ethylene Pipeline (WEP) as well as petrochemical plants it is supposed to feed.
Addressing the inauguration of one of these petrochemical plants recently, Iran’s petroleum minister Bijan Zangeneh said Iran’s third petrochemical hub will be established after Assaluyeh and Mahshahr.
Over recent years, petrochemical industry has captivated Iranian officials due to its appropriate productivity and revenue generation. WEP is the most important investment project by Iran’s petroleum ministry for the development of Kurdish-populated areas. In case the downstream sector of these plants is also launched the final products could be exported to Turkey and Iraq because there are no petrochemical facilities in eastern Turkey and northern Iraq.
Due to proper infrastructure, Iran’s petrochemical industry is currently on the path of growth and development, but it needs to complete its value chain. Therefore, as long as the upstream oil sector, particularly South Pars gas field, is being developed, downstream industries must be also taken into consideration as a national strategy.
It must be noted that a balanced development of petrochemical industries requires downstream industries everywhere across the country. Iran is currently building the longest ethylene pipeline in the world in its western provinces with the objective of developing its petrochemical industry and generate more value-added from ethane. According to Iranian petroleum industry officials, the total production from petrochemical projects under way in western Iran, mainly for Kurdish-populated areas, will be worth $8 billion by 2017. Petrochemical plants in western Iran are expected to produce two million tons this year. These plants are the third largest producers in the country.
Marzieh Shahdaei, managing director of National Petrochemical Company (NPC), said this pipeline has a capacity up to 3 million tons. So far five compressor stations have been installed on the way of this pipeline. Apart from compressor’s price, this pipeline has so far cost IRR 12,000 billion.
$4.7bn Investment
Investments made in petrochemical plants located throughout the path of WEP total $3.5 billion. Furthermore, $1.2 billion investment is under way.
The bulk of ethane produced at the refineries of South Pars phases is expected to be delivered to Kavian Petrochemical Plant by next March. Kavian Petrochemical Plant is currently operating at 70% of its rated capacity. After ethane is converted into ethylene to be injected into WEP, a major development will transpire Iran’s petrochemical industry.
WEP is the most important and the largest project remaining from the 4th Economic Development Plan for Iran’s petrochemical industry. This project was adopted in 2002 by the then government in order to help underprivileged western provinces make up for backwardness, create jobs, engage the private sector, stimulate production and upgrade technology in the oil sector. The project was planned to come on-stream by early 2008, but due to many changes, technical problems and increased costs, so far the project has almost progressed 80%. Currently, 5,000 staff are directly employed by petrochemical plants under way in western Iran. Once these plants come online, 3,000 more jobs will be created.
Given the existence of upstream plants along the path of WEP, downstream petrochemical industries are expected to produce a variety of petrochemicals and keep this industry away from selling raw materials. After completion, WEP will have the capacity of transferring 3.5 million tons of ethylene. It will receive 2.5 million tons of ethylene from South pars and one million tons from Gachsaran. WEP will feed 11 petrochemical plants.
11 Petchem Plants
The operations for the construction of Hamedan, Dehdasht, Mamesani, Boroujen and Kazeroun sections of the pipeline have yet to start. Like