Iran Petrochem Revenues to Reach $21.5 Billion by March 2022

EghtesadOnline: Revenues generated by selling petrochemical products in domestic and international markets are predicted to reach $21.5 billion by the end of the current fiscal year (March 2021-22), managing director of National Petrochemical Company said.

News ID: ۷۸۶۸۳۴

10 August 2021

“Close to 43 million tons of petrochemical commodities are expected to be produced in 67 petrochemical companies, of which 33 million tons will be exported,” IRNA also quoted Behzad Mohammadi as saying.

Exports of 27 million tons of products earned $10 billion in 2019. About 8 million tons of petrochemicals worth $5 billion were sold in the domestic market last year, he added.

According to Mohammadi, opening new plants, including 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, Hegmataneh Petrochemical Plant in Hamedan, Miandoab Petrochemical Complex in West Azarbaijan Province and Kangan Petro Refining Complex helped NPC to raise its output capacity by 25 million tons in 2020.

“Petrochem plants across the country received 40 million tons of feedstock, including condensates, ethane, natural gas and naphtha, in the last fiscal year, which was equivalent to 1 million barrels of crude per day that will rise to 2 million barrels per day in 2025,” he added.

With the inauguration of new complexes over the next four years, the number of petrochemical plants will reach 77, up 15% compared to the current situation.

The NPC chief noted that “studies show we are facing a shortage of propylene [200,000 tons] and if no action is taken, the deficit will grow to 700,000 tons in five years”.

“NPC has invested close to $80 billion in petrochemical plans over the past four decades,” he said, adding that $25 billion are expected to be invested in the key sector in the next four years.

The NPC chief noted that petrochemical revenues from exports and domestic sales in seven years exceeded $110 billion.

“Of the total earnings, $80 billion included exports worth $30 billion,” he said.

Reports say 67 petrochemical companies contributed 40% of the currency traded in the secondary foreign exchange market, known locally as Nima.

“As petrochemical production rises, less crude oil will be exported,” Mohammadi said, announcing that local sales have risen by 700,000 tons compared to a year ago.

Propylene Production Up

In related news, managing director of Imam Khomeini Shazand Oil Refinery in Arak, Markazi Province, said the annual output of propylene at the refining company has increased by more than 40%.

“Propylene production at the refinery was less than 140,000 tons per year until last year, but with the development of technology and the use of scientific and research capacities, the output capacity has now reached 200,000 tons per annum,” IRNA quoted Gholamhossein Ramezanpour as saying.

Propylene is the second most important starting product in the petrochemical industry after ethylene. It can be transformed into value added goods like polypropylene and create jobs in the downstream sector.

The final phase of a petrochemical unit is downstream where natural gas and oil are transformed into marketable petroleum products. Overall, the downstream process has multiple parts, including distributing and selling the goods.

The primary material for propylene comes from cracking naphtha and other liquids such as gas oil and condensates. However, propane can also be used to produce propylene.

Completing the value-added petrochemical production chain can help cut the import of strategic commodities like propylene and also develop the key downstream sector.

Shazand Oil Refinery began operations in 1993. Besides producing propylene, its annual output includes 5.2 billion liters of gasoline, 4 billion liters of diesel, 430,000 liters of kerosene and 400 tons of granular sulfur.

Currently, the National Petrochemical Company imports close to $1.5 billion worth of petrochemicals a year, of which $600 million constitute propylene, for which there is a chronic shortage in the market.

Iran produces a large variety of petrochemicals (350 types), for which there is high international demand, but for propylene it is an importer.

Propylene output is as low as 1 million tons because an efficient value-added chain is lacking.

Most chemical industries depend on propylene rather than being ethylene-based; and due to the shortage of propylene, downstream and complementary industries have been unable to function as expected.

To overcome the deficiency, a development plan has been drawn up for raising annual propylene production to 3 million tons. The plan is being implemented in three regions in the south, west and north of the country.

Already a major item in the global energy market, the role and significance of petrochemicals continue to grow. Demand for plastics – the most familiar group of petrochemical products – has outpaced almost all other bulk materials (steel, aluminum or cement), and has nearly doubled since 2000.