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IPF Exclusive / May 2003 |
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Fourth Iran
Petrochemical Forum | Summit 2002 |
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Iran’s Petchem
Has Come of Age
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Development of the giant South
Pars gas field in the Persian Gulf will provide the necessary feedstocks
for petrochemical industries along the 2,440 km coasts of southern Iran. |
Almost four decades have passed since
Iran laid the foundations of its petrochemical industry, long before other
regional countries embarked on a similar endeavor. Backed by an abundance of
oil and gas resources, the Iranian petrochemical industry flourished over the
years while launching joint ventures with international companies until it saw
the hard times. The outbreak of Iran-Iraq war slowed down industrial progress,
lowered investment and production and triggered hesitation among many
potential partners to step into Iran. The country’s total output of
petrochemicals consequently fell down to a meager 800,000 tons.
However, the tough situation forced
Iranian industrialists and local companies to show greater self-confidence and
innovation. After the cease-fire, decision-makers of the Iranian petrochemical
industry mobilized their forces and drew up development plans for progress at
full pace. As a result, the country’s petrochemical production reached 3.7
million tons in 1996, 11 million tons in 1999 and 15.5 million tons in 2001.
Major Plants:
Located at Imam Khomeini port by the Persian Gulf, Bandar Imam Petrochemical
Complex is a leading producer of petrochemicals in Iran. The complex was
commissioned under two stages in 1991 and 1994. With 4.8 million tons of
nominal capacity, it produces polymers, chemicals, rubber and plastics. Over
65% of the plant’s products go for export.
Razi Petrochemical Plant, another
producer at Bandar Imam, was commissioned in 1968. It manufactures chemicals
and chemical fertilizers at 3.6 million tons of nominal capacity per year of
which more than 15% is exported.
Commissioned in 1969, Khark
Petrochemical plant is a producer of methanol, liquid gas and sulfur. Running
at about 1.1 million tons of nominal capacity, this plant sends over 8% of its
products for export.
Arak Petrochemical Company is another
player on the stage. It manufactures rubber, plastics and chemicals at 1,108
million tons of nominal capacity while sending around 6% of its products
overseas. The company was commissioned in 1993.
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A
greater awareness inside Iran of the fact that gas must be the basis of
the country’s development plans will sure put the petrochemical industry
on top priority. |
Standing next in the queue are Shiraz
Petrochemical Co. (commissioned 1963), Khorasan Petrochemical Co.
(commissioned 1996), Tabriz Petrochemical Co. (commissioned 1995-97), Isfahan
Petrochemical Co. (commissioned 1992) and Urmia Petrochemical Co.
(commissioned 1999). These plants produce a range of chemicals, chemical
fertilizers, aromatics and polymers.
Competitive Advantages:
Holding the world’s second-largest reserves of natural gas may be an
undeniably unique advantage of the Iranian petrochemical industry. A greater
awareness inside Iran of the fact that gas must be the basis of the country’s
development plans will surely put the petrochemical industry on top priority.
At the same time, the petrochemical
sector in Iran has been trying to diversify its points of strength. A rich
pool of skilled human resources, cost-effective operations due to abundance of
energy and availability of machinery and engineering services, easy access to
the Persian Gulf and the Caspian Sea as well as the market of their littoral
states, establishment of special zones for erecting petrochemical plants, tax
holidays for investors and demands on the market are some additional
advantages that the Iranian petrochemical sector enjoys.
A Competitive Edge:
Development of the giant South Pars gas field in the Persian Gulf will provide
the necessary feedstocks for petrochemical industries along the 2,440
kilometer coasts of southern Iran. Purified natural gas, sour gas, liquefied
natural gas, ethane and gaseous condensates to be provided through development
of the twelve phases of South Pars make it highly economical to produce
petrochemicals in Iran since low-priced feedstock results in attractive prices
of final products. This gives Iran a competitive edge in the global
petrochemical market.
The Fifth Element:
One matter of concern, as Iranian authorities have repeatedly underlined, is
that a few countries in this region would be targeting the same markets for
the same range of petrochemicals to be produced through similar development
plans. This saturation simply serves no one’s interests.
Many experts believe that the key to
success in development and marketing is striking partnerships and forming
regional alliances that will bring reciprocal benefits. Into its fifth decade
of operation, the Fifth Element for Iranian petrochemical industry could be
strategic alliance with regional giants to ensure bright prospects for all.
Time and again, NPC officials have expressed their willingness to launch such
collective efforts and greater contacts between executives of regional
petrochemical industries which seem to be gradually paving the way to this
end. |
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CURRENT ISSUE |
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IPF Exclusive
May 2003 |
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