NPC Spending $8.5 Billion to Raise Petrochemical Feedstock Production

EghtesadOnline: The 55 petrochemical companies in Iran annually use 35 million tons of natural and liquefied gas as feedstock to produce 31 million tons of products, managing director of the National Petrochemical Company said.

News ID: ۷۵۰۲۷۱

20 June 2020

“To help raise annual feedstock supply by 14 million tons, seven projects costing $8.5 billion will come on stream before the fiscal year ends in March 2021,” ILNA quoted

The initiative is aimed at collecting and utilizing natural gas burnt off in the southern oil and gas fields, he said.

The Parsian Sepehr Refinery, with two plants in Fars and Bushehr provinces, and three natural gas liquid projects, namely Dehloran Gas Refinery in Ilam Province, Kharg NGL Plant on Kharg Island off the Persian Gulf and the NGL 3200 project in the southern Khuzestan Province are being completed.

NGL, or natural gas liquids, are components of natural gas that are separated from the gas in the form of liquids. Natural gas liquids are valuable as separate products. Ethane, propane, butane, isobutane, and pentane are all NGLs used for a variety of purposes like inputs for petrochemical plants, burned for space heating and cooking, and blended into vehicle fuel.

According to the official, NGL 3100, a gas venture to collect and process associated petroleum gas from oilfields in Ilam and Dezful, will get 6 million cubic meters of gas per day from Dehloran, Paydar, West Paydar and Cheshmeh oilfields (all in Ilam Province).

NGL plants are designed to process gaseous hydrocarbons, including ethane, propane, butane and pentanes, and even higher molecular weight hydrocarbons. When processed and purified into finished byproducts, all these are collectively referred to as natural gas liquids or NGL.

Kangan Petro Refining Company is another petrochemical project under construction in southern Bushehr Province.

When operational “it will refine gas from South Pars Phase 12 and supply 3.5 million tons of value-added products to the downstream sector a year”, he said.

Another project (to help increase feedstock capacity) is the Persian Gulf Bid Boland Gas Refinery in southwest Khuzestan Province, which is in the final phase and help feed petrochemical plants in southern regions supplying 48 mcm of natural gas a day to the national gas network.

Falling Prices

International petrochemical prices have fallen (by 30% on average) in the last seven months due to historic low crude prices (used as feedstock in petrochemical plants) and the economic recession caused by the Covid-19 pandemic.

“The best way to offset lower petrochemical prices is to diversify production with value-added goods.”

Put simply, a feedstock like ethane or propane should be converted into more than one commodity via completing the value chain and development of petrochemical downstream sector.

Petrochem firms 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.

Of the total output, 23 million tons were exported to international markets and the balance was sold to local firms.

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.

Referring to petrochemical plants use of catalysts, Mohamamdi noted that the global catalyst market is worth $18 billion of which 2.2% is used in Iran.

NPC’s chief added that the local petrochemical sector uses $400 million worth of catalysts a year most of which is produced locally

Iranian companies use at least 23,000 tons of catalysts a year. Private companies produce 20,000 tons covering most of the demand.