“The ministry is making efforts to tackle feedstock-related challenges in petrochemical plants to pave the way for the production of value-added commodities,” Marzieh Shahdaei was also quoted as saying by NIPNA, the National Petrochemical Company’s news agency.
The official noted that the operation to extend an ethane pipeline from South Pars Phase 2 to Phase 1 to increase petrochemical plants’ feedstock is being followed up by the ministry. According to the official, financing incomplete projects is another thorny issue that is being handled through negotiations with the National Development Fund of Iran and the Central Bank of Iran.
Energy experts believe that frequent fluctuations in the US dollar’s exchange rate have seriously disrupted petrochemical plans, hence the administration should take effective steps to resolve the problem, according to Financial Tribune.
“Incomplete ventures, which have registered a work-in-progress rate, will be given priority over other initiatives,” she said.
On the looming US sanctions, Shahdaei emphasized that all sectors will be affected to some extent and petrochem industry is not an exception.
US President Donald Trump unilaterally withdrew the US from Iran’s nuclear deal in May.
“As long as international conditions do not improve favorably, petrochemical downstream industries cannot boom because selling products and purchasing high-tech machinery all depend on such circumstances,” she said.
“Notwithstanding all shortcomings, Oil Ministry is keen on developing petrochemical sector, as it has the potential to help the country circumvent sanctions by raising revenues.”
Shahdaei noted that the abundance of natural gas as feedstock for petrochemical projects gives Iran a distinctive advantage, stressing that the more the value-added chain is completed, the less crude will be exported.
Reportedly, petrochemical commodities account for 35% of the country’s non-oil exports.
Tehran aims to diversify its economy that is largely dependent on oil export revenue and make better use of its hydrocarbon reserves by producing petrochemicals with higher value-added.