Petrochem Sector’s Gas Consumption Meager Compared to Profit Potential

EghtesadOnline: The volume of natural gas consumed by 67 petrochemical companies in Iran is negligible compared to the industry’s revenue-generating potential.

News ID: ۷۸۷۱۸۹

20 October 2021

Rejecting claims of high consumption of natural gas in petrochem sector, the Energy Today’s website, based on information from the National Petrochemical Company, reported that Iran’s daily natural gas consumption tops 700 mcm, of which only 10% or 70 mcm are used daily in the petrochem sector, while households and power plants burn 50 mcm and 30 mcm of gas per day respectively.

Of the total gas supplied to petrochemical plants, 50% are used as feedstock and converted to value-added products and the rest is used as fuel to heat the boilers.

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.

According to NPC, 67 petrochemical plants across the country received 35 million tons of feedstock, including condensates, ethane, natural gas and naphtha, in 2020, which was equivalent to 1 million barrels of crude per day. The figure is expected to exceed 2 million barrels per day in six years.

With the inauguration of new complexes, the number of petrochemical plants will reach 77, up 15% compared to the present.

Almost 60% of petrochemical projects are in Asalouyeh and Mahshahr in southern and southwestern Iran, and the rest are scattered nationwide.

Among the sectors affiliated to the oil industry, the petrochemical sector is the most profitable, as there are many customers for its products all over the world.

Water Consumption

Referring to water consumption in the sector, the website noted that most petrochemical plants are located in Asalouyeh, Bushehr Province, and Mahshahr, Khuzestan Province, and due to their proximity to the Persian Gulf and Karoun River, they do not need to tap into depleting groundwater resources in the dry regions.

The website claimed that petrochemical companies in Iran account for less than 0.5% of total annual water consumption.

Iran's annual water consumption (extracted from ground and surface resources) tops 100 billion cubic meters, of which only 70 million cubic meters are used in the petrochemical sector annually, which is much lower compared to the agro sector that gobbles up 90 bcm of water per year.

Petrochemical plants in Asalouyeh and Mahshahr consume about 350 mcm of water per annum, of which 280 mcm come from the Persian Gulf and the rest (70 mcm/y) is extracted from deep wells.

Drawing a parallel, NPC noted that the company’s annual water extraction from renewable water resources equals the amount of water used in Tehran on 14 days.

Household and industrial sectors account for 7% and 3% of total water consumption respectively.

According to Behzad Mohammadi, the head of NPC, 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 20, 2022).

“Close to 43 million tons of petrochemical commodities are expected to be produced by 67 petrochemical companies in 2021, of which 33 million tons will be exported,” he said.