Andimeshk Ethylene Oxide Construction Starts
The construction of an ethylene oxide plant has started in the city of Andimeshk in the oil-rich province of Khuzestan in southwestern Iran, during a ceremony attended by Petroleum Minister Bijan Zangeneh. The project, whose capacity is estimated at 300,000 tonnes, would take in about 90,000 tonnes of ethylene fed into the West Ethylene Pipeline (WEP
Zangeneh has said that Iran’s petrochemical industry was bracing for a major change, adding that petrochemical feedstock would be more than needed in the next calendar year. About $388 million is to be invested in the Andimeshk project. The Persian Gulf Petrochemical Industries Company, known as Persian Gulf Holding, is to provide the financing. In addition to ethylene oxide and downstream industry products, monoethylene glycol, ethoxylate, glycol ether, ethanol amine and MDEA would be supplied by the Andimeshk plant. Each of these products would be able to complete a chain of petrochemical products that would be used in paint, textile, cosmetics, hygiene, pesticides, cement industry, gas sweetening and detergents among other sectors.45mt Products Hit MarketAddressing the event to start construction operations in Andimeshk, Zangeneh said Iran’s petrochemical production was valued at $20 billion for 30 million tonnes a year. He added that Iran’s petrochemical output would reach 45 mt/y within two years, as new projects would come online. “I hope that construction of the Andimeshk petrochemical project would end within three years. This new project is a new line for ethylene plants and could turn into an industrial cluster in the region and then hundreds of downstream petrochemical plants would be established to create jobs,” said the minister. Zangeneh said Iran’s petroleum industry was at the receiving end of US sanctions, adding: “They want to prevent us from selling oil and transferring its money. They have so far failed to do so.” He said Iran had already experienced tough time during the early days of the 1979 Islamic Revolution and the 1980-1988 imposed war. “But the pressure that the enemy has exerted on Iran has been unprecedented. Today we do not have deaths, injuries and bombing, but the enemy's pressure is tougher. However, they have achieved nothing and they will not,” he added.Zangeneh said $6.5 billion would be invested in Iran’s petroleum industry. “The items I said should not be purchased from abroad. Furthermore, some resources would be spent on the development of oil-rich areas,” he added. Zangeneh touched on the issue of a 100 mcm/d increase in Iran’s production capacity, saying: “Gas supply projects are in their final stages. We didn’t have any problems with regard to providing the required gas for winter. There was no pressure fall-off nor cut in the gas supply.” “In the midst of sanctions, our petrochemicals production increased. We are doing our best to finish all projects,” he added.Zangeneh said oil production from West Karoun had increased from 70,000 b/d in 2013 to 300,000 b/d now, which would soon reach 350,000 b/d. He added that crude oil recovery from the Azar field would double to 60,000 b/d by March 2020. Referring to Petroleum Ministry plans for coping with sanctions, the minister said: “We are going ahead under tough conditions, but we will not disclose our plans for countering the sanctions.” “Along with my colleagues, I will be exposed to pressure so that the Iranian nation would remain glorious. We will continue development activities in the petroleum industry. Investors are coming, but I don’t name them to head off the enemy exploitation,” said Zangeneh.Downstream Petchem ProfitabilityJafar Rabiei, CEO of Persian Gulf Holding, said the petrochemical industry has so far focused on midstream, saying it was now important to take steps towards the downstream sector.“The Andimeshk ethylene oxide project is a downstream ethylene project, which would be more profitable than polyethylene, and has a complete downstream value chain,” he said. Rabiei said the BuAli, Nouri and Bandar Imam petrochemical plants would list on the stock market in the next calendar year. “The Persian Gulf Holding has five companies listed on the stock market. We have a 12% share in the stock market now,” he said.Rabiei said: “Currently, $8.5 billion worth of petrochemical development projects are under way by the Persian Gulf Holding. The three main projects – the Bid Boland gas refinery, Lordegan urea/ammonia and Ilam Olefin totally valued at $4 billion – would be inaugurated in” the next calendar year.Fereidoun Hassanvand, head of the Iranian parliament’s Energy Committee, said the start of construction operations for the Andimeshk project was indicative of the futility of US sanctions. “Today we are selling our oil and making investment, as well,” he said. The Andimeshk plant is being constructed in an area which would be very close to Iran Gas Trunkline 6 (IGAT6) to receive gas feedstock and near "Karkheh Dam" to have access to water. The Khuzestan Power Company and the Fajr Petrochemical Plant are to supply the required electricity to the new project.Economic and technical feasibility studies have been conducted for the petrochemical project. Under the present circumstances, the successful bidder for fencing operations has been identified. The project is owned by the Persian Gulf Holding, while it would be developed by the Petrochemical Industries Development Management Company (PIDMCO).