The Forum for Partners in Iran's Marketplace

August 2011, No. 61

Exclusive 16th International Oil Show

Solid Steps in Privatization

One of the policies of the industry is to expand the chain of value through intermediate and supplementary industries

Abdolhossein Bayat, Deputy Oil Minister and Managing Director of National Petrochemical Company, in an interview answered the following questions:

What are Iran's preferences in petrochemical industry?

The specific geographical position of Iran makes the country fully distinct from other countries to such an extent that preferences in petrochemical industry have brought the following advantages:

1. Presence of hydrocarbon resources in the South Pars and Khuzestan fields

2. Significant amounts of ethane in gas resources of the country, which is the basic material for the development of the petrochemical industry

3. Sustainability of price formula for natural gas in comparison with other oil feed

4. Raw materials extracted from natural gas enjoy favorable prices

5. There are abundant numbers of skilled manpower in the petrochemical industry of the country

6. Easy access to the blue waters of the Persian Gulf provides great advantage of benefitting from plenty of water for industrial use and for cooling towers

7. Proximity to the Persian Gulf coasts results in significant reduction in transportation costs and easy access to target markets

8. Import/export facilities provided in different ports in the Persian Gulf eases the business process

9. Domestic market demand for petrochemical products with regard to population growth in the country is on the rise

10. Close proximity to the growing economies around the country

11. Powerful domestic manufacturers are also another strong point for the development of the petrochemical industry

What is the status of Iran's petrochemical industry in the region and the world?

By the end of 2010 petrochemical products output amounted to over 44 million tons of which about 42 percent were exported to the world market and the remaining were consumed domestically. About 23 million tons of this amount were produced in Mahshahr and about 21 million tons in Assalouyeh. According to the scheduled plans the production capacity of these products would increase to above 100 million tons by the end of 2014. The production share of petrochemical industry in the Middle East region was about 27 percent in 2010 which placed the industry in the second stand. Its share in the world in the same year was about 2.5 percent. However, in comparison with the figures for 2005, when the share of the industry stood at 1.08 percent, a growth of 2.3 percent could be noticed over the period mentioned.

What are the target export markets of Iran's petrochemical industry?

Currently the Far East by absorbing 41.5 percent of exports of Iran's petrochemical industry is our largest target market. Next stand the Middle East, Europe, Indian Subcontinent, and South East Asia, respectively with 23.9 percent, 13.9percent, 10.7 percent and 9 percent. The remaining 1 percent is exported to other countries.

Petrochemical industry is a pioneering industry in the field of privatization. Would you please further elaborate in this regard?

With regard o the privatization policies of Article 44 of the Constitution which are conveyed by the Supreme Leader, the National Petrochemical Company has taken solid steps in this connection to such an extent that from 2007 up to 2010 some 21,997 shares of different parts of the industry with an approximate value of $9 bn has been ceded to the private sector.

Given plans underway for the development of the industry and increase in its production capacity, would you please further elaborate on the projects under implementation in the petrochemical industry?

Currently 63 projects with a total production capacity of 64 million tons have been planned in different parts of the country with the completion of which the production capacity of petrochemicals would increase over 100 million tons. The amount of estimated investment for the implementation of the projects is about $49 bn.  

For example 7 projects with a production capacity of 6.4 million tons are located in Mahshahr while 23 projects with a production capacity of 30.8 million tons are located in Assalouyeh.

Along with the West Ethylene pipeline there are three supplier complexes with a capacity of 3.5million tons and 11 consumer complexes with a capacity of 3.2 million tons.

Apart from the regions already mentioned, has the National Petrochemical Company considered other points for the realization of its development targets?

Yes. One of the policies of the industry is to expand the chain of value through intermediate and supplementary industries that would be implemented through chemical parks in cities, such as chain development of styrene, sulfur, ethylene, propylene, methanol and benzene. It has also been predicted that this industry would be expanded in gas field of North Pars, Lavan, Qeshm, Kish, Oman Sea borders and Chabahar.


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  August 2011
No. 61