Investment in Iran New Petchem Hubs
Iran's National Petrochemical Company (NPC) is an important wing of the country's oil diplomacy. It embarked on significant measures four years ago. Iran is currently producing at least 60 million tonnes a year of petrochemical products, while more than 60 petrochemical projects remain incomplete envisaged in the previous five-year economic development plans. Once these projects come online, Iran's petrochemical production capacity will double.
Under the next administration of President Hassan Rouhani, Iranian petrochemical officials intend to produce more feedstock at the giant South Pars gas field as more petrochemical plants are to be built. The new plants are projected to be constructed in new petrochemical hubs.
Mahshahr is home to 21 petrochemical plants with a total capacity of 25.6 million tonnes a year and Assaluyeh is home to 13 petrochemical plants with an annual capacity of 24.3 million tonnes. They are Iran's main petrochemical hubs.
Since development of industrial hubs is a key factor in the industrial development of countries, and favorable and sustainable development of petrochemical industry in these hubs hinges upon preparing general and specialized infrastructure, the NPC is studying potential petrochemical hubs within the framework of its development plan with a view to proximity to sources of feedstock, water and facilities for exporting petrochemicals.
Among the areas under study for petrochemical projects are Special Petrochemical Zone in Mahshahr, Parsian Energy Industry Site, Lavan Island, Qeshm Island, Jask and Chabahar.
Marzieh Shahdaei, CEO of NPC, said Iran's petrochemical roadmap would require 36 new projects in the new hubs. These new projects would add 60 million tonnes to the country's petrochemical output capacity. That would be the third jump in Iran's petrochemical sector.
Future development of petrochemical industry will not be limited to Bandar Imam and Assaluyeh as four other hubs off Persian Gulf and the Sea of Oman would also see new projects.
Parsian Special Economic Zone in eastern Assaluyeh, Jask Free Zone located next to the Strait of Hormuz, Chabahar Free Zone and nearby Iranshahr Free Zone are the four hubs.
In addition to these four hubs, four mega-tone methanol and urea/ammoniac projects with capacities above one million tonnes in Lavan and a number of GTP plants in the mainland are envisaged. Since natural gas will be available in abundance in the near future, the NPC intends to apply GTO and GTP technologies to produce olefin which is crucial to downstream industrial development.
Senior NPC managers say investments in the Persian Gulf and the Sea of Oman will continue. All Persian Gulf and Sea of Oman coasts have potential to become petrochemical hubs due to access to feedstock and high seas. The private sector is building new hubs in Chabahar, Jask and Parsian. Iran has already laid out a pipeline as far away as the Pakistani border for future transfer of gas. The pipeline has capacity to carry 105 mcm/d of gas. Pakistan would be receiving 25 mcm/d of gas; therefore, the pipeline would be able to supply more than 75 mcm/d of gas to petrochemical plants in southeastern Iran.
Furthermore, railroads in southeastern Iran and Chabahar Free Zone could be attractive for investors. Required infrastructure is also envisaged to be erected in Jask, Parsian and Lavan.
In the near future, natural gas will become the main feedstock for Iran's petrochemical plants because ethane would not be easily accessible. Given Iran's huge gas deposits, it will be one of the most reliable countries for investment in petrochemical projects.
Iran, Suitable for Investment
Iran enjoys unique opportunities for petrochemical development thanks to its access to liquid and gas feedstock required for this industry. Iran holds the largest hydrocarbon (oil and gas) reserves in the world. There are also other advantages in Iran like long sea borders in the Persian Gulf and the Sea of Oman that could save foreign investors big sums in shipping products to target markets.
Educated and experienced youth and the skills developed by designing, engineering, construction and installation companies are among other advantages in Iran. Above all, with a population of more than 80 million and easy access to important consumer markets like Central Asia, Iraq, India and China, Iran would be attractive enough for potential investors. Add to this Iran's free trade and special zones that would allow foreign investors to invest alone and be exempted from taxes and duties for 10 years.
"Iran envisages more than 105 mcm/d of methane, 2.8 million tonnes a year of ethane, 2.1 million tonnes a year of propane, butane and liquefied petroleum gas as well as four million tonnes a year of naphtha as feedstock for its new petrochemical projects in the future. Domestic and foreign companies that would operate these projects will have no problem with feedstock," Shahdaei said.
Petrochemical industry consumes huge amounts of water and energy and many petrochemical units are already facing water shortages and decline in exports. Therefore, development of infrastructure in new hubs