developing petrochemical industry.
Increased Exports to Western Neighbors
Iran's petrochemical industry, which has experienced growth over recent years, will enter a new phase once petrochemical plants in western Iran come online.
Hamedan Petrochemical Plant is in its final stages of construction. Kurdestan Petrochemical Plant came online earlier this year and the first phase of Ilam Petrochemical Plant became operational several months ago.
Undoubtedly, Iran's western area could turn into a reliable industrial hub in the near future once petrochemical industry has been developed and plans would get under way for building downstream industries. Then, in addition to meeting domestic demand, the western area of Iran could export petrochemicals overseas.
Senior officials at Iran's National Petrochemical Company (NPC) says after the startup of Ilam, the focus is now upon three other petrochemical plants.
The Ilam plant is close to coming on-stream. The startup of several other petrochemical plants in western Iran would eradicate deprivation from those areas and build infrastructure in underdeveloped parts of the country.
Marzieh Shahdaei, former CEO of NPC, said recently that WEP would create new jobs in western Iran. Meantime, startup of several other petrochemical plants would create jobs in the provinces located near the pipeline.
Given the conditions of WEP, the only body competent to decide about the status of this project in terms of remaining in the hands of state of being privatized is the government. Maintenance and safeguarding of this pipeline and accountability to consumers of ethylene is an issue of extreme significance and sensitivity.
The Cabinet had assigned the project to the Ministry of Petroleum in 2002. At that time the project was limited to the provinces of Kohguiluyeh Boyer Ahmad, Kermanshah, West Azarbaijan and Kurdestan. But later on, other provinces like Khuzestan and Hamedan were included.
With the implementation of Article 44 of the Constitution, all petrochemical units located along the WEP route were hived off the private sector, while no decision has been made on the fate of the pipeline. The issue of status of WEP remains a complicated affair in Iran's petrochemical industry because maintaining a 2,865-km pipeline carrying ethylene is sensitive and costly.
Startup Operations May Be Privatized
Abdol-Hossein Bayat, deputy CEO of NPC for WEP affairs, recently said that the startup operations for the project were likely to be awarded to a private competent company without competitive bidding.
"Privatizing the ownership of this pipeline is out of the question," he said.
"Whereas Phase 1 of this pipeline, stretching from Kavian Petrochemical Plant located in Assaluyeh to Kermanshah Polymer Plant for a length of 1,060 kilometers was launched in 2012, and Phase 2 of this pipeline stretching from Kermanshah Polymer Plant to Mahabad Petrochemical Plant for an approximate length of 1,766 kilometers is also ready to come online, it is necessary that the startup operations of these two phases be assigned to a competent company," added Bayat.
"With the completion of phases 15, 16, 17 and 18 of South Pars and the supply of ethane to Kavian and Morvarid petrochemical plants and other olefin units in Assaluyeh, the required ethylene for all petrochemical plants located on the WEP route will be supplied and these two phases of WEP could be brought close to full operation by raising the ethylene pressure to 90 Bar and launching all pressure booster compressors," Bayat said.
A scenario which has long been bandied about regarding the fate of WEP has been its assignment to Kavian Petrochemical Plant as a major producer of ethylene. However, conditions are such that the final producer and consumer of ethylene in this project is a single company.
Manufacturing some alcohol-based products, materials for agriculture, chemicals and other special products are among advantages of transmission of ethylene by this pipeline. That, along with other uses of ethylene in polymer production, has made ethylene production and transport prosperous in the market. That shows the very high value of this commodity. A major point in the Resilient Economy instructed by Supreme Leader Ayatollah Ali Khamenei with regard to the petroleum industry has been to avoid selling raw materials.
What could drive Iran away from oil-dependent and single-product economy towards a safe margin would be sustainable development, i.e. generating value-added, engaging in teamwork and making maximum benefit from whatever is already available.
WEP can render significant services to the economy of western Iran. The pipeline and petrochemical plants located alongside it are able to process, produce and supply products of high value-added; therefore, they play an important role in upgrading Iran's economic standing, reducing jobless rate, creating jobs and generating revenues.