100-Billion-Dollar Opportunity ahead of Iran’s Petrochemistry

In the light of launching diverse projects in the recent years, Iran’s Petrochemistry industry has witnessed a tremendous forward leap both in production and in the variety of products. Not only has this development expanded Iran’s export to other countries and gained foreign exchange for the country, but it also has led the country to complete the value chain of petrochemical products.

News ID: 80167

Date: 13 August 2018 - 10:20

These two factors have made Iran a self-sufficient country in the production of petrochemical material and have also made country needless of importing intermediate products. Moreover, relying on domestic capabilities and access to abundant feed has brought about more profit for the country. Owing to an increase in the production of petrochemical industries, foreign exchange has flooded into Iran’s economy, and this has made a valuable contribution to controlling the recent fluctuations in foreign exchange markets.

Despite launching multiple petrochemical projects in recent years, Iranian petrochemical industry still witnesses various other projects in its agenda, which could noticeably boost the production rate and as well, could add new products to Iran’s petrochemical production basket.

In order to learn further about the latest production projects of this industry, MNAN correspodent arranged an interview with the director of quality control at National Petrochemical Company (NPC), Ali Mohammad Bosaghzadeh. You will browse the transcript of this interview in the upcoming section.

As the first question, I would like to seek your input on the role of holdings in moving petrochemical prospects forward, give the current conditions of oil and petrochemical industry of Iran?

The division of petrochemical complexes among petrochemical holdings has created efficient conditions for them. Besides, other than production, holdings currently have other projects in their agenda. Hence, supplying financial resources by petrochemical holdings has been facilitated and smoothened.

As a case in point, Persian Gulf Holding has 15 subsidiary complexes, and thanks to these support sources, it managed to advance desirably in Bidboland 2.  Bidboland 2 is a massive project, which needs over 2 billion Dollars of investment. Even though it failed to progress well in the past few years and it had not witnessed any noticeable physical advancement prior to being delegated to Persian Gulf Holding, it experienced a tremendous move toward its completion last year and up until now, it has reached the progress rate of 75%. Does it keep its current advancement trend,  Bidboland 2 is speculated to be inaugurated by the end of this year.

Another instance I could refer to is Ilam Petrochemistry, which is one of the most crucial Olefin projects in the country. The project has advanced up to 95% and we are hoping to see its inauguration this year.

Other holdings are also under desirable conditions. Parsian Investment Co. managed to launch a urea unit in Shiraz. Its Urea/Ammonia project is also under construction in Phase III of Pardis. Moreover, it is completing Kermanshah Urea/Ammonia project, which has advanced up to 35%.

In the light of expanding the activities, it has created a healthy competition between holdings for carrying out the projects.

It is hoped that by relying on financial resources which are resulted from an increase in production, supplying more shares in stock exchange market and taking loans from holdings, we will witness an improvement in the conditions of plans and projects. In addition, in terms of financial supply, a section which is called supportive holding has been formed. this kind of holding was also used for first financial supply in MAPNA Group and currently it is used in petrochemical industry and oil ministry as well.

It is worth mentioning that launching project fund is a suitable and appropriate strategy which promotes trust and participation of people for investment in stock exchange market. In this circumstance, not only will people play a big role in financial supply of projects, but also those can be shareholder of the project once it is completed, this trend will make a big contribution to the progress of the project.

What measures have been taken for absorbing foreign investment, which countries are forerunner in this regard?

Given the current situation and the efforts by European countries to save the Iran nuclear as well as receiving the full support from Russia and China, it is hoped that we can absorb more investment from abroad.

On the other hand, during the last two years ago, two or three-year loans have been taken from countries such as South Korea and Japan. In the light of negotiations, it is also hoped that we can increase loans amount which will accelerate the completion process of the projects.

Could you please brief us on the current projects of  Iran’s Petrochemistry industry?

The costs of projects which have been proposed so far will reach 100 Billion Dollars, Currently, the projects with the value of 50 billion dollars are under construction and other 50 billion dollars is related to the projects which have been introduced in Sixth Development Plan.

A considerable part of these projects are related to propylene projects.

The production of propylene will be done in two ways; it will be produced from propylene gas or propane.

To compensate the shortage of propane, which is used to produce propylene, we had taken some big steps. In the last year, we had a noticeable progress in Salman Farsi projects, which persuaded us to propose some new projects.

In order to produce propylene from extra propane,   we have considered also some plans in Asalouyeh as well. Now, we have received the land, and are engaged in equipping it. Generally, the efficient condition has been created.

In a nutshell, it seems that we will witness a noticeable growth in the production of propane and propylene in this year.

While Iran has recorded an acceptable figure in the production of various products, however, the production of propylene and poly propylene has received a serious attention in the recent years, why the produion of propylene is of great important for Iran’s Petrochemistry industry?

Considering the global per capita consumption of polymer, the amount of consumption in polymer family in comparison with polyethylene is growing at a rapid pace. Thus, the production of propylene will result in absorbing market and increasing Iran's share in production of polymers of propylene. Because up until now, the production of propylene and poly propylene could just meet domestic needs, even sometime we suffer from the lack of them. Therefore, with the implementation of this project, Iran can become an exporter of these products.

For an increase in the production of propylene in Iran, the projects of GTX and GTP have been proposed. However, since an investment up to 1.5 billion dollars is necessary for these plans, we need to supply liquidity from foreign financiers or stakeholders. So, these projects are progressing at very slow pace, but both government and oil ministry have decided to allocate more privilege in this regard to activate the projects.

Now, two of Asian companies have expressed their willingness to invest in GTX projects, the initial studies in this regards have been done.

Given that Iran’s Petrochemistry industry is contantly moving forward, what plans have been considered to accelerate the current trend?

For the time being, in Asalouyeh and in the first phase of petrochemistry, all unites are under service, moreover, all plans in this section will be limited to complementary and optimized projects.

Half of complementary projects are related to Persian Gulf Holding and the other 50 % is related to launch new plans in Parsian zone. All extra gas which was usually burned in feller, would be gathered to produce products with higher added value.

With the implementation of this project, over 1.5 million tons of urea will be produced which not only creates added value but also makes a significant contribution to the environment.

In the second phase of Asalouyeh, some complexes have launched production and some other like Marjan Petrochemical Plant and first phase of Busher Petrochemical Plant are scheduled to launching their production in this year.

It is projected that the completion process of other projects will be accelerated.

Kian Petrochemical Co. which can be regarded as the heart of the second phase of Asalouyeh, will be able to complete a proper chain of integrity in the second phase and the chain of other products like monostyrene, which may face supply shortage.

However, since the capacity in the two phases of Petrochemical Special Economic Zone in   Asalouyeh has been completed, we had reached an agreement with Pars Special Economic Energy Zone (PSEEZ), in a case that some projects need to use the feed of this zone like propane and butan.

In addition to existing capacity in the zone and complete implementation of petrochemical material chain, the launching of third site of Asalooyeh was also put on the agenda.

This site is largely responsible for production of petrochemical lower-hand materials, considering the feeds which are available in PSEEZ, we have employed foreign consultant to help us in selecting the best production chain which creates the highest value- added.

Parsian Special Economic Energy Zone which faces the lack of land in Asalooyeh will be used for petrochemical upper-hand and middle-hand projects. Now, the investors have been selected and the infrastructural facilities are being constructed. In addition, the first phase of deck in this region will be inaugurated in August 2018, which would be responsible for transferring the raw materials.

Once the launching of these projects are completed, how much capacity will be added to the production of petrochemical products in Asalooyeh?

In the light of launching the new projects, the production capacity in Asalooyeh will increase more than double than the existing one. Thus, we are endeavoring to expand the capacity of the decks in the region.

Could you please explain about the latest condition of Makran Special Zone and its role in developing  Iran’s Petrochemistry industry?

Since Makran Special Zone is located on the margin of Persian Gulf and one the other hand, the infrastructures which have been created so far in this region will include four projects of  GTX which will take their feed from Iran Sahar, therefore, it is necessary to accelerate the process both in terms of quality and specialty.

Based on this, a contract was signed between Makran Special Zone and The National Iranian Gas Company (NIGC), given the prioritizing this contract in three sections, it is hoped that we will witness speed up the progress of plans.

It must be also added that utility of this region will be supplied by MAPNA Group. This process has begun since last year and has reached the progress rate of 30%.