Iran Wants to Start Petrochemical Production in Caspian Regions

EghtesadOnline: Construction of petrochemical plants in the northern regions straddling the Caspian Sea is on the agenda of the National Petrochemical Company, managing director of the company said.

News ID: ۷۴۸۵۳۲

25 September 2019

"Gilan, Mazandaran and Golestan provinces have access to abundance water, which makes them well-suited for petrochemical plants," Behzad Mohammadi was quoted by ILNA as saying.

Referring to the government's plans to diversify the key petrochem sector now largely concentrated in the south, he said building petrochemical infrastructure in the north will create jobs and lift the region's economy.

Refining, petrochemical, and chemical industries need huge quantities of water, which explains why these industries have come up largely in Iran's southern regions off the Persian Gulf, according to Financial Tribune.

However, petrochemical and oil industries have not  taken root in the north as authorities have taken little if any meaningful measures to tap into oil and gas deposits in the Caspian region.

According to reports, construction of a major petrochemical plant started with much fanfare in Gilan during the government of former president Mahmoud Ahmadinejad. But the complex, which was to be commissioned in three years, has been plagued by financial constraints since 2010.

"While NPC's proposal to build petrochemical plants in the northern regions may have some advantages, there are number of drawbacks, the most significant of which is the risk to the environment," Mehrad Ebad, a member of the Tehran Chamber of Commerce, Industries, Mines and Agriculture said.

Mahshahr in Khuzestan Province and Asaluyeh in southern Bushehr Province are among the most polluted regions in Iran largely due to the petrochemical industry. "Why should the same scenario be repeated in the north?"

Moreover, southern ports like Mahshar, in addition to being connected to international waters, have easy access to natural gas as feedstock. Nonetheless, extending a 1,500 kilometer pipeline to transfer gas from Asalouyeh to Bandar Anzali in Gilan Province would not make economic sense, he says.

On the other hand, Mohammad Hussein Qorbani, a member of the Majlis Health and Treatment Commission, is among proponents of the NPC plan to help the north emerge as a new player in the petrochemical sector.

"Northern regions should not be deprived of these lucrative industries under the pretext of environmental concerns," he has been quoted as saying.

Petrochemical is Iran's most important industry after oil and gas. It has played a key role in economic growth as it creates value-added and helps reduce oil and gas exports on which the economy has been dependent for decades.

Petrochemicals accounted for almost 35% of non-oil exports last year.