IPF Specialized Seminars

 

Seven specialized seminars were held on the sidelines of the 11th Iran Petrochemical Forum (IPF) in Tehran. The seminars focused on the status of Iran’s petrochemical industry, petrochemical market and products, investment and financing.

The first panel discussion was attended by Mohammad Hassan Peyvandi, forum chairman and vice president of the National Petrochemical Company (NPC), Jean Sentenac, CEO France’s Axens, Volfgang Hoppman, technical director at Germany’s Karl Schmidt Spedition GmbH & Co. KG, and Andrea Borruso, president of Switzerland’s Borruso Polymers GmbH.

 Peyvandi opened the session, which was the first panel discussion of the forum on Saturday, giving an outlook from Iran’s petrochemical activities.

 “In 2013, Iran’s petrochemical production capacity reached around 60 million metric tons. In the 5th Development Plan, the sector experienced a jump in growth but the pace slowed down in the years after,” he said.

 “We are planning to make a change in the petrochemical sector, applying a new approach,” he added.

 Peyvandi predicted that the sector will produce as much as 10 million tons of methanol within the next five years.

 He expressed hope that the country can earn $26 billion from the export of 55 million metric tons of petrochemical products in the near future. To achieve the goal, the sector needs $33 billion in foreign investment, he added.

Sentenac urged Iranian officials to have “a cohesive strategy” that could guarantee capital return. He suggested Iran should use modern technologies that help it achieve set objectives.

An analyst of the Asian petrochemical markets discussed methanol prices in the region.

Asia methanol prices have recently been lower than the rest of the world in general, supporting the flow of methanol from Asia to the West, NG Bao Ying, a senior editor with Asia Petrochemicals, Platts said.

 

She said however that the shale boom in the US may tip the scales, pushing feedstock natural gas prices lower and supporting higher methanol production.

 Currently, she said, more than 11 million metric tons a year of new methanol capacity is slated to come on stream by 2019.

 "There are not as many new plant start-ups in Asia, although Iran has announced a slew of projects to come on stream," she said. There is talk that the methanol trade flow may reverse, with shipments from the West coming into Asia.

 Overall, she said, strong US methanol production capacity growth is likely to see a reduction in Asia methanol volumes heading westward, especially if Asia demand increases.

Countries all over the world should cooperate with one another to recover from the 2008 financial crisis and to support the energy sector, said Issa Mashayekhi, the managing director and board member of the NPC international LTD.

 “Superiority of Iran’s gas resources is a strategic strength for ability to supply reliable and affordable required feedstock for petrochemical complexes,” he said.

Mashayekhi said he believes the growth of the petrochemical industry in Iran “is not only beneficial to the region but it contributes to the growth and prosperity of the world as a whole.”

The lower the weight factor of political aspects of issues affecting the industrial sector the higher the possibility to turn the world to a better place to live for everybody by appropriately using resources of all parts of the world.

“The large oil and gas reserves available in this part of the world [Iran] shall be regarded as a divine gift for the well-being of all mankind,” he said.

An Asian journalist said the methanol produced in Iran is used in a variety of downstream products all over the world, including in China.

 “Iran has been a key play in supplying the world’s methanol demand, especially to major economies such as China and India,” said Yu Guo, a senior editor with ICIS in Singapore.

 Iran’s petrochemical firms have the capacity to produce more than 5 million metric tons of methanol of which nearly 90% is exported, meeting a major part of the global demand, she said.

 

She said the country’s methanol production capacity is to be increased by another 2 million metric tons by 2016, she said. “Therefore, it is very important to know the trade flows and factors that are influencing methanol prices in Asia.”

 ICIS Methanol editors will compile a comprehensive presentation, making sense of the major markets in Asia.

 

Propylene Market

 

A specialized meeting of the forum attended by Mohammad-Hassan Peyvandi, deputy managing director of National Petrochemical Company (NPC) and foreign guests from France, Switzerland and Germany focused on the market of propylene and its derivatives.

Peyvandi provided general figures about Iran’s petrochemical industry and said that Iran’s petrochemical production capacity reached 60 million tons in 2013.

He said Iran’s petrochemical industry grew quickly at the beginning of the country’s Fifth Five-Year Economic Development Plan (March 2005-March 2010), but the pace of progress slowed down over recent years.

Peyvandi said Iran’s petrochemical industry is set to make progress due to huge reserves of South Pars gas field.

He said seven methanol projects, financed by Chinese companies, are under construction, adding that 10 million tons of ethanol will be produced over the coming five years.

Peyvandi said 55 million tons of petrochemicals are planned to be produced, adding that Iran is estimated to sell 26 billion dollars of petrochemical exports every year.

Petrochemical projects currently under way have had 20 percent progress and they need 33 billion dollars in investment to become operational, he said.

The official added that some 1 million tons of polyethylene will be added to the country’s production capacity when phases 15&16 and 17&18 of South Pars become operational.

He said an objective pursued by Iran’s petrochemical industry is to produce propylene, adding that good plans have been made to that effect.

In the same session, Axens CEO Jean Sentenac urged Iranian officials to have “a cohesive strategy” that could guarantee capital return.

He suggested Iran should use modern technologies that help it achieve set objectives.

Sentenac said Iran should consider options in which the rate of return on investment would be favorable.

He said that fuel and petrochemical production in oil and gas-rich countries is cost-effective.

Wolfgang Hoppman, technical director at Germany’s Karl Schmidt Spedition GmbH & Co. KG, stressed the need for the establishment of logistic petrochemical hub in Iran.

He added that the German company is even ready to help Iran set up a logistic hub in order to win more customers.

Hoppman said millions of tons of petrochemicals exported from the Middle East countries require intelligent logistic planning. 

Iran plans to turn the Sea of Oman’s costal region into the country’s petrochemical hub. The coastal region has enormous potential for the establishment of petrochemical complexes.

Iranian Petroleum Ministry is pursuing the policy of developing new petrochemical hubs to avoid excessive reliance on Iran’s current petrochemical powerhouse.

It is planned to establish petrochemical hubs in areas such as Jask, Chabahar and Iranshahr, which are located across or near the Sea of Oman.”

The southeastern town of Iranshahr has the highest potential to turn into Iran’s petrochemical hub due to its proximity to the Sea of Oman and the Iran-Pakistan gas pipeline.

Compared with other petrochemical complexes such as Assaluyeh and Mahshahr, Iranshahr is 1,000 kilometers closer to destination markets such as India and China.

The water needed by the planned petrochemical complex in Iranshahr will be provided from the Sea of Oman and the required natural gas will be transferred through Iran-Pakistan pipeline.