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IPF Exclusive, July 2013


Tenth Iran Petrochemical Forum | Summit 2013

Iran's Petrochemicals
Achieving 100m Ton Target
!
 

 


Petrochemical industry among economic sectors of the country has the most influence in adoption of export promotion policy on economic growth and has the second place among economic sectors of the country


 

Saeed Razmkhah, Senior Consulting Editor

About half a century have passed since the establishment of the first petrochemical complex in Iran. This industry is among strategic industries in the country. Among relative advantages of petrochemical industry in Iran abundant hydrocarbon and raw materials could be cited which is among factors for development of this industry.

Among specifications of petrochemical industry one is its high value added. That is to say, with chemical and physical changes on oil and gas hydrocarbons the value of the product could be increased by 10 to 20 percent. Diversity of products, providing raw materials to thousands of factories and downstream workshops and creating job opportunities and fetching hard currency revenues have placed this industry in a prominent position in the country's economy.

Petrochemical industry among economic sectors of the country has the most influence in adoption of export promotion policy on economic growth and has the second place among economic sectors of the country (non-oil).

In 2011, the world's proven oil and gas reserves amounted to 1.3 trillion barrels and 180 trillion cubic meters, respectively. Iran after Russia by holding over 33 trillion cubic meters of natural gas stands in the third place in terms of gas reserves. Therefore, Iran holds 18% of the world's natural gas resources. Qatar by 25 trillion cubic meters and Turkmenistan by 8 trillion cubic meters are among major gas rich countries. Among countries possessing natural gas resources, Iran has the highest capacity for developing this industry.

The inception of petrochemical industry in Iran (1964) resulted in the construction of the fertilizer unit of Shiraz Petrochemical Complex and establishment of the National Petrochemical Industries Company.

This was followed by establishment of other petrochemical units until 1977. They include Bandar Emam Petrochemical Complex (Iran-Japan), Razi Petrochemical (Shahpour), Abadan Petrochemical (Pazargad), Ahwaz Carbon (Iran), Kharg Petrochemical, Farabi Petrochemical (Iran Nippon).

Meantime, with the implementation of the first economic development plan of the Islamic Republic of Iran reconstruction of damaged complexes during the Iraqi imposed war (1980 - 1988) and commissioning of basic projects including Bandar Emam Petrochemical Complex, Esfahan Petrochemicals and Arak Petrochemicals started.

The trend of investment in this industry is one of the main economic variables which could result in the economic growth of the country.

The trend of investment during 1997-2007 indicates that the average annual investment in the Third Plan was 21 billion and 459 million rials and in the first three years of the Fourth Plan was 208 billion and 23 million rials.

In the year 2007 the volume of investment in petrochemicals in the total gross fixed investment in the country was 3.7%. Hard currency investment in the petrochemical industry increased from $81 million in 1999 to $1443 million by the end of 2007. This figure indicates an increase of 18%.

The local currency investment made in petrochemical industry increased from 1814 billion rials in 1999 to 12045 billion rials by the end of 2007 which is indicative of a six fold increase.

Studies conducted so far indicate that in order to gain access to the goals stipulated in the Fifth Plan as well as in the Vision Plan for the year 2025, the Islamic Republic of Iran needs to make $50 billion in petrochemical industry in the country.

Meanwhile, attraction of private sector and foreign investors is a priority in realization of the set goals.

According to petrochemical industry outlook access to a capacity for production of 100 million tons of different petrochemical products has been considered by the end of the Fifth Plan in the year 2015.

The value of petrochemical products in 2015 would be $26 billion of which the value of products which could be supplied to the market would be more than $20 billion.

Gaining access to an annual production of 7.5 million tons of methanol in 2015 with a value of about one billion dollars (equal to 18% of the total global capacity) and fetching a share of 20% in global trade is among other goals of the Vision Plan with regard to petrochemical industry.

Moreover, the National Petrochemical Industries Company follows the following goals in its perspective plan:

  • Access to an annual production of 12 million tons of ethylene

  • Access to an annual production of 10 million tons of polymer

  • Access to an annual production of 8.5 million tons of urea

  • Access to an annual production of 4 million tons of aromatics (BTX)

  • Increase in the investment share of foreign and private sector in the entire petrochemical industry ownership to 50%

  • Access to the highest share in the production of methanol in the world

  • Access to the highest share in the production of ethylene and urea in the Middle East (without doubt realization of the set plans would be possible with the supply of the feedstock required by petrochemical units by the Oil Ministry).

  • Annual maintenance of 10 million tons of ethane

  • Daily maintenance of 183 million cubic meters of natural gas

  • Daily maintenance of 315 thousand barrels of gas liquids

  • Daily maintenance of 400 thousand barrels of gas liquids

 

It seems that with regard to the present performance of under operation plans by the National Petrochemical Industries Company and with regard to the outside factors such as problems in attracting foreign investment, trade restrictions caused by economic sanctions, etc. the National Petrochemical Industries Company in its efforts to gain access to its mega targets should accelerate implementation of its projects on the basis of technical/managerial and executive/financial planning.

 

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  July 2013
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