Iran Petrochem Revenue $14.5 Billion

EghtesadOnline: The 55 petrochemical companies in Iran produced 31 million tons of products in the last fiscal (ended in March) and exports generated $9.5 billion, managing director of National Petrochemical Company said.

News ID: ۷۵۰۱۴۳

01 June 2020

“Of the total output, 23 million tons were exported to international markets and the balance (8 million tons worth $5 billion) was sold inside the country,” the Oil Ministry news agency quoted Behzad Mohammadi as saying Sunday.

Last year’s production was equivalent to 2018 (close to 30 million tons) and NPC’s total earnings in 2019 stood at $14.5 billion, he said.

Global petrochemical prices have fallen (by 30% on average) in the last five months not only due to historic low crude prices (used as feedstock in petrochemical plants) but also due to the economic devastation unleashed by the Covid-19 pandemic.

Regarding expansion of the petrochem sector, he said   16 development plans are being undertaken, of which 12 are projected to go on stream in the current fiscal at an estimated cost of $12 billion.

Kaveh Methanol Company in Bushehr Province, olefin units in Ilam Petrochemical Complex in Ilam Province, Bidboland Persian Gulf Gas Refinery in Behbahan County, Khuzestan Province, urea and ammonia units of Lordegan Petrochemical Complex in Chaharmahal and Bakhtiari Province, Masjed Soleyman Petrochemical Company's ammonium and urea units in Khuzestan Province, Hegmataneh Petrochemical Plant in Hamedan, Miandoab Petrochemical Complex in West Azarbaijan Province and Kangan Petro Refining Complex -- a major petrochemical and refinery project in Bushehr Province -- are slated to come online in 2020.

“Upon completion, the projects will add 30% (or 20 million tons) to NPC’s annual output that presently is 66 million tons.”

Value-Added Methanol Products

According to Mohammadi, the plans will increase NPC’s methanol output and it will have excess methanol, because of which implementing development projects to convert low-valued methanol into high value-added products like propylene is on the NPC agenda.

Annual propylene production now is 1 million tons. Nonetheless, three is a shortage of at least 200,000 tons, he said, adding that although output will reach 2 million tons in 2025, the deficit will rise to 700,000 tons.

Three projects, namely Salman Farsi, Hirsa Polymer and Kourosh are being developed in Mahshahr Petrochemical Special Economic Zone in Khuzestan Province. Four other plants, namely Entekhab, Mehrpetro Kimia, Azaran and Razavi are in the final phases of completion in Bushehr.

What is produced is used in its entirety by the domestic market.

"Propylene is a strategic commodity. It can be transformed into value added products like polypropylene and create jobs in the downstream petrochemical sector."

Most petrochemical plants are in Mahshahr in southwestern Khuzestan Province and Assalouyeh in the Persian Gulf, where water supply is not a major concern and proximity to international sea lanes makes transport and shipment cost effective.

The official said the plants in their entirety buy 25.3 million tons of feedstock from oil and gas refineries per annum.

Iran produces a large variety of petrochemicals (about 350 items), for which there is high international demand.

“We have 30 export destinations in Europe and Asia. There are several hundred customers worldwide for our products,” Mohammadi was quoted as saying.

The petrochemical sector is Iran’s second important industry after oil and gas. It has played a key role in economic growth as it creates value-added and reduces the sale of oil and gas on which the economy has been dependent for decades.

With abundant hydrocarbon resources and private sector investments, Iran is striving to play its destined role in the international petrochemical market and broaden its scope.

Iran’s petrochemical industry has made decent progress since the 1980s. Production capacity has increased 22-fold in four decades and the number of companies has increased nine times.