Demand Driving Iran Petrochemical Sector

EghtesadOnline: With domestic and international demand rising at a rapid pace, investment in the key petrochemical industry, now around $80 billion, will reach $108 billion by 2027, managing director of the National Petrochemical Company said.

News ID: ۷۸۵۷۸۲

18 January 2021

“Up until now 64 petrochemical complexes are operating in different parts of the country. This will increase to 109 by 2025 and 116 two years later,” the NPC news website Nipna quoted Behzad Mohammadi as saying.

Referring to the role of the key sector in national revenues, he said: “Petrochemicals account for almost 30% of the non-oil export. Last year the industry generated $15 billion.”

Iran’s petrochemical production capacity will reach 100 million tons per year BY 2022 from the current 76 million tons. The total yearly petrochemical production will reach 133 million tons in seven years.

Several projects aim at producing polypropylene -- the world's second-most widely produced synthetic plastic, after polyethylene  -- that is used in a variety of applications including packaging and labeling, textiles, carpets, stationery, plastic parts and reusable containers, laboratory equipment, loudspeakers, automotive parts and polymer banknotes.

In 2018, global propylene output was 120 million tons and is planned to reach 160 million tons by 2030, mostly due to propylene production plants opening in Asia and the Middle East.

Iran is determined to diversify its economy and make better use of its hydrocarbon reserves by focusing on petrochemicals with higher value-added. Petrochemical companies now produce 333 types of polymer grades and 80 types of chemicals and have gained the technical knowhow to indigenize 70% of the catalysts, the official added.

Feedstock supplied to the petrochemical industry is 800,000 barrels of oil equivalent per day, which is expected to reach 2.2 million boe/d in six years, Mohammadi said.

Regarding plans to convert flare gas into valuable feedstock for the petrochemical firms, he said: "Next week, Bid Boland Persian Gulf Gas Refinery will be inaugurated. It is a mega project that will turn associated petroleum gas into feedstock for the petrochemical industry. Through these projects, we will prevent substantial volumes of flaring.”

APG is natural gas with deposits of petroleum and is often released as waste and burnt as flare gas. Flaring is an important safety measure at many oil and gas production sites, as it prevents industrial plant equipment from over-pressuring and exploding.

Burning high levels of APG is a major source of pollution. Flaring because it releases methane, ethane and propane into the atmosphere. Flare stacks are the main contributors to the worsening air pollution in the southwestern Khuzestan oil region.

Bid Boland Gas Refinery is located in Behbahan County in Khuzestan. It is the Middle East’s largest refinery with an annual production capacity of 10.4 million tons of methane, 1.5 million tons ethane, 1 million tons propane, 600,000 tons gas condensates and 500,000 tons butane.

It will boost production of sweet gas and other gases used in petrochemical plants in Mahshahr and supply urban areas. Exports are also on the agenda.

Regarding environmental measures to reduce carbon dioxide emissions by the industry, Mohammadi said four petrochemical companies have noticeably cut emissions compared to last year. Shiraz Petrochemical Company has reduced pollutants by 418,000 tons per year, Kermanshah Complex by 40,000 tons, Maroon Company by 150,000 tons, and Razi Complex by 435,000 tons.

“In 2016, of the 49 petrochemical complexes 32 added to air pollution. Three years later 19 out of 56 companies were polluters,” the official noted, adding that the process to reduce hazardous emissions is part of the job.