Natural gas, chemicals and downstream petrochemical products accounted for 58% of Iran’s non-oil export value during the first eight months of the current fiscal year (March 21-Nov. 21), the head of the Iranian Oil, Gas and Petrochemical Products Exporters Union said.
“Iran sold $31 billion worth of non-oil products in the 246-day period, of which $18 billion were generated by exporting polymers, gas, bitumen and methanol,” Hamid Hosseini was also quoted as saying by IRNA.
Giving a breakdown, he added that more than 100,000 tons of bitumen were exported in the eight-month period.
Revenues generated by selling polymers, methanol, urea and aromatics amounted to $4 billion, $2 billion, $1.3 billion and $700 million respectively during the period under review.
Close to 5 million tons of butane and liquefied gases have also been sold in international markets.
Criticizing the high price of gas delivered to plants as feedstock, the official noted that each cubic meters of gas was sold to petrochemical factories at 13 cents last year, which has now increased to over 35 cents.
Referring to the explosion that killed four people at Charmshahr Petrochemicals Plant in Bouin-Zahra County, Qazvin Province, Hosseini said there are many distillate fuel storage tanks in petrochem facilities and similar accidents could also happen in other plants in the near future.
“In the past, distillate fuel could be exported, but now it is banned. They cannot be stored in tanks due to the potential danger and nobody knows what to do as directives change every week,” he added.
Distillate fuel is a general classification for one of the petroleum fractions produced in conventional distillation operations. The liquid fuel is usually distilled from crude petroleum and includes diesel fuels and fuel oils.
The official further said the fuel used to be burnt, but the Department of Environment does not permit plants to burn the fuel anymore, and since they cannot export the fuel, a large amount of fuel has swelled up in refining facilities and they don’t know what to do.
Distillate fuel are used in automobiles, locomotives and agricultural machinery as well as heaters and power generators.
Hosseini warned that similar explosion will cause heavy pollution in other provinces whose residents are already dying due to the intense air pollution.
Kaveh Methanol Complex
In related news, IRNA quoted Ebrahim Asgarian, the head of the board of directors at Kaveh Methanol Complex in the Persian Gulf port city of Bandar Dayyer, Bushehr Province, as saying that the petrochemical plant has been shut down due to exorbitant gas prices.
“The plant’s operations have no economic justification any longer, as the National Iranian Oil Company has started to sell each cubic meters of gas to us at 35 cents since last week, while the same amount of feedstock is sold at 19 cents in Europe.”
The production of each ton of methanol costs the firm $430, yet it can be sold at a maximum price of $310 in foreign markets.
Asgarian said the company is incurring losses of $120 per ton, because of which it will halt operations until further notice.
Kaveh Methanol Complex, which became operational in 2020, increased Iran’s annual methanol production by 2.3 million tons to reach 14 million tons.
It is the largest of its kind in Iran and the world, and receives 6 million cubic meters of natural gas as feedstock per day to produce methanol, ethylene, sulfur, acetic acid, ammonia, urea and polymers.
The private Kaveh Glass Industry Group, which accounts for 60% of domestic glass production, is the main shareholder of the methanol company that is expected to annually generate $400 million.
Of the total annual methanol production in the country, close to 700,000 tons are sold in the domestic market and the rest is exported.
National Petrochemical Company’s data show that in 2020, Iran accounted for 13% of the world's total methanol trade (85 million tons) and its main export destinations are Iraq, China, the UAE, India and South Korea.
Export Revenues
Methanol export revenues in 2020 surpassed $2 billion.
China consumes 67% of the world's methanol output and needs to import this product for many years.
Iran is one of China’s key trading partners, accounting for 30% of total Chinese methanol import in the past three years and is likely to remain so.
Because methanol value-added chains, including methanol-to-olefins and propane dehydrogenation, are not yet complete in Iran, NPC has to sell methanol for $300 per ton to China where it is converted to propylene and sold for $1,200 per ton.
Traditionally, methanol is used as feedstock to produce chemicals such as acetic acid and formaldehyde, which in turn are used in products like adhesives, foams, plywood subfloors, solvents and windshield washer fluid.
In the petrochemical industry, methanol is used to create high-quality chemicals, the most important of which are formaldehyde, acetic acid, MTBE, methyl methacrylate, methyl chloride and methylamines, which are processed to produce other derivatives.
The global methanol market is expected to grow at a significant rate in the coming years, driven mainly by the increasing use of methanol (in the form of fuel and antifreeze agent) in the automotive industry.
The methanol industry has experienced an explosive growth, primarily in China and the United States, owing to significant developments in shale gas.
