Countdown for the World’s Largest Ethylene Pipeline in Iran
Iran has picked its petrochemical industry as a means of reducing raw substances sales with a view to creating sufficient value-added. The petrochemical industry has over the past decade been through a period of growth and development.
One of the major petrochemical projects cashed in on largely today is the West Ethylene Pipeline (WEP) that would feed a number of petrochemical plants lying on its way.
Bijan Zangeneh, Iran’s minister of petroleum said recently that WEP would be virtually the third petrochemical hub in the country behind Assaluyeh and Mahshahr. The petrochemical industry has over recent years been taken into serious consideration more than ever due to acceptable productivity and hard currency generation. WEP is Iran’s largest petroleum industry investment for development in the west of the country. Once all petrochemical plants located on the WEP route become operational, it would be possible to deliver final products to neighboring countries: Turkey and Iraq.
Iran’s petrochemical industry, which is currently on its path towards growth and development, would need to complete its value chain. Concurrently with the development of the upstream sector and the commissioning of South Pars gas field phases, the downstream segments of this key industry must be taken into consideration as a national strategy. In order to guarantee a balanced petrochemical development, measures are needed for creating downstream industries across Iran. Iran is currently constructing the largest ethylene pipeline in the world in a bid to develop its petrochemical industry and create higher value-added from ethane.
WEP’s maximum capacity is three million tonnes. So far, five compressors have been installed on this pipeline. Compressors aside, the pipeline has so far cost IRR 12,000 billion. The total investment made in the plants located on the WEP path reaches $3.5 billion. The investments currently under way total $1.2 billion.
WEP is the most important project dating from the 4th Five-Year Economic Development Plan. This key petrochemical project was aimed at making up for underdevelopment in western provinces, job creation, engagement of the private sector, motivating the process of production and upgrading technology in the oil sector. Adopted in 2002, the project was expected to come online by early 2008. However, due to technical problems and lack of budget allocation, so far it has only had 80% progress.
Currently, 5,000 persons are directly working in the petrochemical plants under construction in western Iran. Once they become operational, 3,000 more jobs would be created.
Whereas upstream plants are located on WEP’s path, downstream industries are expected to quit raw substance sales by supplying diverse petrochemical products.
Once operational, WEP would have capacity to carry 3.5 million tonnes of ethylene – 2.5 million tonnes of which would be supplied from South Pars and 1 million tonnes from Gachsaran. A total of 12 petrochemical plants would be fed.
Western Iran, New Petchem Hub
The sections crossing Hamedan, Dehdasht, Mamesani, Boroujen and Kazeroun are yet to start. Tabriz Petrochemical Plantthe same as Ilam Petrochemical Plant has been connected to WEP. The 2,700-km WEP pipeline would feed 11 petrochemical plants including Kermanshah, Andimeshk, Lorestan, Kordestan, Miandoab and Mahabad. The Kavian, Lorestan and Mahabad petrochemical plants as well as the Kermanshah polymer plant are already operational. The ethylene produced by the Kavian plant is delivered to the Kermanshah Petrochemical Plant.
WEP carries the Kavian plant’s products with a view to developing the petrochemical industry in western Iran.
Iran’s petrochemical industry, which has been growing fast over recent years, will enter a new phase next year as petrochemical plants come online.
Western Iran can become a reliable petrochemical hub in the future due to the development of the petrochemical industry and planning for downstream industrial projects. Products supplied by these plants would meet the domestic needs and serve exports, as well. Ilam petrochemical plant has already come on-stream. Operations are also under way in western Iran for building three more petrochemical plants. The planned commissioning of several new petrochemical plants in western Iran would eradicate deprivation and create development infrastructure in underdeveloped areas.
Due to the full support of the National Petrochemical Company (NPC), WEP is currently in its final stage.
Abbas Sha'ri-Moqaddam, a former CEO of NPC, said that a major challenge in the way of this pipeline was local obstructions in the provinces crossed by this pipeline.
The second phase of the Kavian plant is now ready and waiting to receive feedstock. The WEP project would create new job opportunities in the area. In the meantime, commissioning of several petrochemical plants on the WEP path would create job opportunities in the neighboring provinces.
Phases 1, 2 Complete
Thanks to support by the minister of petroleum and cooperation on the part of the judiciary and police in Khuzestan Province, the last obstacle in the way of completing WEP was removed and the challenge to the construction of the power transmission line of Compressor N. 3 in Ahvaz Province was overcome. Phases 1 and 2 are now complete. In these phases, the main principle was “coordination and synchronization” with other plants located on the path. None of operational petrochemical plants were likely to be waiting for WEP to receive feedstock; rather, the two phases came online several months prior to the commissioning of the petrochemical plants so that they would receive their ethylene feedstock.
Phase 3 under Way
Operations for completing Phase 3 of WEP have started. During the first days of the current calendar year, a 150km section of the pipeline, stretching from Miandoab to Tabriz, came online. It is noteworthy that 143 km of this pipeline belonged to National Iranian Oil Products Distribution Company (NIOPDC). The second section is connected to the Dena area, which is 60 kilometers long stretching from Siah Makan to Gachsaran Petrochemical Plant. The necessary environmental permits have been obtained and the contractor has been chosen. The objective behind this project is to carry ethylene from the Gachsaran olefin plant to the main WEP route. Because the Mamesani, Kazeroun, Dehdasht and Boroujen petrochemical plants located on this route have yet to be completed, the Gachsaran ethylene plant would be temporarily connected to the main pipeline. However, whenever these projects become 40% complete, the government or NPC would start building the sections allocated for ethylene delivery. This project is aimed at helping the Gachsaran petrochemical plant.
Compressor stations 2 and 7 are located in Siah Makan and Gachsaran, respectively. Constructing these two stations began last February and is likely to be over in two years.
Given the possibility of ethylene surplus in WEP, 1.8 million tonnes of ethylene supplied by the Kavian and Morvarid petrochemical plants are being delivered to petrochemical plants located on the WEP path. With Kavian’s 2-million-tonne, Gachsaran’s 1-million-tonne and Morvarid’s 150,000-tonne capacity, there would be a 3.15 million-tonne production capacity in the future. If Gacsharan ethylene plant becomes operational while consumer plants don’t, there would be possibility of ethylene surplus, in which case, the ethylene supplied by the Gachsaran petrochemical plant would be swapped with the ethylene produced by the Kavian plant so that the surplus would be exported from Assaluyeh.
The third connection will carry ethylene from Sanandaj to Bu Ali Sina Petrochemical Plant through a 190-km pipeline. But as long as the project is not 40% complete, it will not start.
During the construction of the third phase of WEP, 400 job oppotunities would be created. Phase 1 is expected to come online by 2023.
WEP feeds petrochemical plants located in Khuzestan, Fars, Lorestan, Kohguiluyeh Boyer Ahmad, Chahar Mahal Bakhtiari, Kurdestan, Kermanshah, West Azarbaijan, East Azarbaijan, Ilam and Hamedan provinces. Production of some alcoholic substances, products for agricultural purposes and chemicals are among advantages of WEP. Ethylene cylinders are popular today, showing the significance of ethylene.
WEP can provide the biggest services to the economy of western Iran. This pipeline and the plants located on its path have potential to process and supply products of high value-added and to be instrumental in Iran’s economic growth, removing unemployment and creating revenue for western Iran.
Chief among advantages of developing downstream petrochemical projects along with such major projects as WEP, are acquiring bigger profits through creating a permanent market for petrochemicals, supplying products to match market needs and be more profitable, helping national job creation plans, and presenting an alternative to petrochemical development plans in various parts of the country.