Petrochem Exports Generate $13 Billion

EghtesadOnline: Exports of petrochemical products generate $13 billion in revenues per annum, managing director of Social Security Investment Company—aka SATA— said.

News ID: ۷۸۲۹۹۸

20 June 2018

“SATA’s petrochemical subsidiaries are striving to adapt their import and export policies to the new dollar exchange rate of 42,000 rials,” Ibrahim Mahmoudzadeh was also quoted as saying by IRNA.

According to the official, although the government has set the rial/dollar exchange rate, feedstock price is still not clear.

“SATA has made plans to invest close to $10 billion in petrochemical ventures in the next seven years,” he said, adding that the construction of petrochemical plants in the port city of Chabahar will gain momentum as soon as Iranshahr-Chabahar gas pipeline in Sistan-Baluchestan Province is completed.

According to Financial Tribune, the pipeline is being laid by Iran’s Defense Ministry with the aim of supplying gas to industrial units in the south of the province, including petrochemical plants, steel units and power stations in Chabahar and Konarak, and supplying gas to the area’s residents.

According to National Petrochemical Company, Marjan Petrochemical Complex—aka 7th Methanol Project—in Phase 2 of South Pars in Asalouyeh as well as Kaveh Methanol Company in Bushehr Province with an annual capacity of 1.65 and 2.3 million tons will become fully operational in summer.

The country's nominal output capacity stands at 62 million tons of petrochemicals per year, while actual production is expected to reach about 60 million tons by March 2018.

NPC hopes to lift nominal output capacity to more than 120 million tons per annum by 2022, the last year of Iran's Sixth Five-Year Economic Development Plan.

Propylene Production

According to Mohammad Hossein Peyvandi, chairman of Tamin Petroleum and Petrochemical Investment Company, expansion of Iran's petrochemical map, as a decisive component of the country's economy, entails boosting the production of key elements such as propylene.

"Providing the infrastructure for propane dehydrogenation should be a priority of the petrochemical industry since the material is the main feedstock in the downstream sector," he said.

Propane dehydrogenation is a step in the production of propylene from propane. Propylene is the second most important starting product in the petrochemical industry after ethylene. It is the raw material for plastic polypropylene, a component that is mainly used in the automotive, textile and packaging industries.

Peyvandi noted that domestic complexes mostly manufacture propylene from methanol, though there are other more economically feasible methods.

"Propylene can also be produced from propane, which unfortunately is not a popular process among domestic petrochemical units," he added.

Unlike many countries such as China that import propane for producing propylene, Iran, despite its enormous hydrocarbon reservoirs, exports the material without including it in its value-added chain. According to Peyvandi, each phase of the South Pars Gas Field in the Persian Gulf produces over 500,000 tons of propane annually but it is shipped overseas, as the country is not yet equipped with the know-how to convert it to more value-added commodities.

The mega gas project is being developed in 24 phases, which can solely supply the country's propane demand and export the rest.

Peyvandi said lack of technical expertise is the main hurdle for making a better use of the valuable material.

"Transferring state-of-the-art technology to convert propane to propylene would be a key move in this case," he said.

The Petrochemical Research and Technology Company of Iran signed several agreements with foreign companies for transfer of know-how related to propylene production from methanol.

Peyvandi noted that setting up the infrastructure can help attract foreign investment in the petrochemical sector, which will consequently lead to job creation.