By Mahnaz Abdi

Petchem sector’s leap and realization of ‘Surge in Production’

June 12, 2020 - 13:3

TEHRAN- Petrochemical industry plays a crucial role in Iran’s non-oil economy, as the petrochemical export is the second largest source of revenue for the country after crude oil. Petrochemical exports already constitute nearly 33 percent of the country’s non-oil exports.

Iran has been highly developing this sector over the recent years as the development of the giant South Pars gas field (Iran shares with Qatar in the Persian Gulf) has been supplying more feedstock to the petrochemical units.

Also, the U.S. sanctioning Iran’s oil exports has encouraged more development of the petrochemical industry to boost exports from this sector.

Now, pursuing the third leap in this sector, the country aims to boost its annual petrochemical production capacity to 100 million tons in the next Iranian calendar year (March 2021-March 2022) from the current 66 million tons.

While the leap in the petrochemical output is a big measure to boost Iran’s non-oil exports, it also plays a very significant role in the realization of the current Iranian calendar year’s motto, which is “Surge in Production”.

The already released data and reports indicate that the petrochemical sector has been moving in the way of growth since the year start (March 20), as the output of petrochemical units in the first 50 days of the current year increased by six percent compared to the previous year’s same period.

According to Jalal Mirhashemi, National Petrochemical Company (NPC)'s production control manager, the country’s petrochemical complexes are producing with a desired capacity, and many complexes have shown production growth since the beginning of the current year.

He said that Iran's petrochemical industry is ready to realize the surge in production intended for the current year, adding that in addition to launching and operating new projects, the existing idle capacity of some complexes will also be used with the measures taken.  

New projects to be implemented

Meanwhile, Iranian Oil Minister Bijan Namdar Zanganeh has announced that 17 new petrochemical plants are planned to be inaugurated across the country during the current year.

The new projects worth about $12 billion are aimed at increasing Iran’s annual petrochemical production by 35 percent in the present year, according to NPC Managing Director Behzad Mohammadi.

With several new projects going operational, the country’s petrochemical production capacity is going to increase significantly this year, as said by the NPC project director.

“In the year of "Surge in Production", the petrochemical industry is trying to benefit from the most of the domestic capabilities and with the new petrochemical projects being inaugurated, the production capacity in this industry will increase significantly,” Ali-Mohammad Bosaqzadeh has said.

Noting that the balanced development of the petrochemical industry is of particular interest among the NPC strategies for the current year, the official said: "In this regard, the development of downstream petrochemical industries is going to prevent the sale of raw materials and will result in the production of products with higher added value.”

He further noted that most of the underway projects in this industry are currently using domestic equipment, licenses, and technological knowledge of the Iranian experts.

More investment to be attracted

The country is also planning to attract more investment to the petrochemical sector in this year.

As announced last week by the head of Pars Special Energy Economic Zone (PSEEZ) Organization, the organization is determined to boost investment attraction in the zone during the current year.

PSEEZ, which is named Iran’s energy hub, is also home to the world’s largest gas reserve, South Pars gas field. Many petrochemical units, which receive feedstock from South Pars gas field, being located in PSEEZ have made the zone also the hub of Iran’s exports of major non-oil commodities that are gas condensate and petrochemicals.

Iran is also planning for making an investment of 44 trillion rials (about $1.47 billion) for the construction of four petrochemical parks in the country, which contribute significantly to the petrochemical output growth.

Technical knowledge to be improved

As strengthening domestic production and indigenizing the knowledge and technology for production of the products and equipment that Iran imports from other countries has become one of the major programs that the country is pursuing in recent years, the National Petrochemical Company has the elevation of technology on its agenda especially in this year which is the year for a surge in production.

During a recent interview, the NPC managing director put emphasis on the necessity of elevating technical knowledge in the petrochemical industry, and said, “We should promote technical knowledge in a way to move toward more diversity in production and also producing products with higher value-added.”

To materialize the goal of indigenizing the production of the oil industry’s equipment, the country’s Petrochemical Research and Technology Company (PRTC) has also played a very significant role in collaborating with the knowledge-based companies for working on innovative research projects for producing various equipment and base-products needed in the industry.

PRTC’s Managing Director Ali Pajouhan has recently announced that the National Petrochemical Company, in collaboration with domestic companies, is planning to indigenize the knowledge for producing nine major catalysts used in the petrochemical industry within the next two years.

However, catalysts are very expensive substances and currently, the country is spending millions of dollars every year on importing such products into the country, producing such catalysts inside the country would make a huge difference in the profitability rate of the petrochemical plants.

Iranian petrochemical industry is currently using 40 different types of catalysts which cost the industry $260 million annually. 

“Currently, the knowledge for producing 16 of the mentioned 40 types has been indigenized which would save the country $105 million every year.” Ali Pajouhan said, adding, “We plan to produce over $100m worth of petrochemical catalysts annually, by the end of the Iranian calendar year of 1400 (March 20, 2022).”

Taking all the above-mentioned approaches and programs into consideration, it is obvious that the petrochemical sector is playing an undeniable vital role in nullifying the U.S. unilateral sanctions against the country, while it also plays a great part in realizing the slogan of “Surge in Production and making Iran self-reliance.

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