Tehran Hosts 13th IPF
Iran Starting Second Jump in Petchem Sector
The 13th Iran Petrochemical Forum (IPF) was held in capital Tehran at a time Iran is planning to start a second period of development in its petrochemical sector.
Iran's minister of petroleum is optimistic about the future of petrochemical industry in Iran thanks to the country's nuclear deal with six world powers, known as the Joint Comprehensive Plan of Action (JCPOA).
Bijan Zangeneh said at the opening of the event on April 22 that petrochemical sector was instrumental in Iran's economic growth.
"Iran sits atop the world's largest gas and the fourth largest oil reserves, and in total it holds the largest hydrocarbon reserves. Therefore, no country has as much feedstock as Iran for the petrochemical industry development," he said.
Zangeneh underlined the role of the government and National Petrochemical Company (NPC) in the second jump in the petrochemical industry in Iran, saying: "The government is not playing the main role in this jump; rather it is tasked with steering for manufacturing, development of infrastructure, discovery of new areas, introducing new investment [opportunities] and following up on the supply and feedstock allocation to applicants."
He highlighted a 10% growth in the weight of Iran's petrochemical output and exports in the last calendar year (which ended on March 20) compared with the year before due to the easing of restrictions that allowed more feedstock supply.
"This industry is among leading industries in Iran's economic growth," said the minister.
Zangeneh said Iran would have recorded an 8-million-ton increase in its petrochemical output over a year and a half ending in September 2017.
Competitive Prices and High Rate of Return
Zangeneh also pointed to Iran's advantage of supply of feedstock for developing its petrochemical industry, saying: "The main feedstock for petrochemical industry has been either supplied or will be supplied after implementation of new projects."
Petrochemical plants often depend on oil and gas refineries for their feedstock, but under the administration of President Hassan Rouhani this trend changed.
"For the first time, under this administration, it was decided that projects be envisaged and implemented to supply feedstock to petrochemical plants," said the minister.
Zangeneh said development of Tang Bijar, particularly development of Khami gas reservoirs in the Ahvaz and Maroun fields, as well as other areas with a rich layer for NLG production were among projects under way to supply feedstock to petrochemical plants.
He said that naphtha supply would be remarkable in Assaluyeh in the future, saying: "Siraf refining complex, with a capacity of 480 tb/d of gas condensate, can supply more than 11 million tonnes of sweet and light naphtha on the market annually."
Zangeneh referred to the pricing of butane, propane, NGL and natural gas, noting that relevant discounts would be decided for long-term investments in case investors contribute to the completion of the value chain.
He said that flare gases would be sold at very low prices as part of plans to feed petrochemical plants.
"The prices currently in effect are very competitive and the investors would gain significant profits," said Zangeneh.
$40bn Projects
The minister said $40 billion of projects were envisioned in Iran's 6th Five-Year Economic Development Plan.
"It is clear that we will need foreign investment in order to finance these projects because progress in this industry is not possible by merely depending on domestic sources," he said.
Zangeneh noted that the National Development Fund of Iran (NDFI) was not enough to help develop Iran's petrochemical industry.
He said that either direct investment must be made in petrochemical projects or financial facilities be granted.
Zangeneh said the Rouhani administration was supportive of private sector investment in this industry.
"I suggest that potential investors visit Assaluyeh and Bandar Imam before investing in the petrochemical industry to take a look at what has been done over the past 15 to 20 years in order to have an assessment of Iran's potential in the petrochemical industry and then they can make up their mind," he said.
Zangeneh also said that long-term fiscal exemptions were among advantages of Iran's petrochemical industry.