Investment in the petrochemical sector in the Seventh Five-Year Economic Development Plan (2023-28) is estimated to reach $35 billion, the vice president for science and technology said.
“Each dollar invested in the key petrochem industry can generate up to $8 in revenues provided that petrochem plants join hands with knowledge-based firm to complete the value chain of their commodities,” Rouhollah Dehqani Firouzabadi was also quoted as saying by IRNA.
The trading of raw materials has a maximum profit margin of 80%, but converting them to value-added products with the help of technology can increase the margin to 1,000%, he added.
In other words, having access to natural resources like oil and gas is not an advantage unless their value chain is completed with technological methods.
Collaboration between petrochem factories and startups is of great importance and the latter has already proved capable of providing the former with catalysts, equipment, machinery and technical knowhow.
According to the official, around $120 million have been invested for completing the value chain in some petrochemical plants, because of which around $1 billion have been added to their annual margin.
According to Morteza Shahmirzaei, managing director of the National Petrochemical Company, Iran’s petrochemical sector has developed exponentially over the last 40 years and its speed of expansion has been twofold higher than the global average.
Annual Capacity
NPC’s annual capacity has now reached 90 million tons and it is still growing steadily.
Globally, petrochemical production capacity almost doubles every 20 years, while Iran’s petrochemical production volume has increased by 100% per decade, he said, adding that NPC’s annual output is expected to reach 200 million tons in the next 10 years.
According to the official, NPC’s top priority is to complete the value chain of low value-added products, including methanol, because of which several initiatives are in different stages of construction across the country and are expected to become operational in the next five years.
Referring to Iran’s access to abundant hydrocarbon reserves, he added that close to 540 grades of chemical and petrochemical products are produced in 67 petrochemical plants, most of which are located in the proximity of the Persian Gulf.
The NPC chief said a number of energy projects in Iran are also in the second phase of development and as soon as they become operational, oil and gas output would register massive growth.
“Joining hands with other countries and drawing on the expertise of foreign companies will play a key role in developing Iran’s oil and gas sectors and augmenting its energy security,” he said.
Shahmirzaei noted that Iran extracts 1 billion cubic meters of gas per day and its crude oil production capacity is about 4 million bpd, some of which are used as feedstock in the petrochemical industry.
With the implementation of ongoing projects, NPC seeks to diversify the range of petrochemical products and help complete the value chain.
Currently, 68 projects worth $35 billion are underway across the country to increase annual petrochemical output by 50 million tons and help develop the downstream sector.
About 67 petrochemical plants across the country received 40 million tons of feedstock, including condensates, ethane, natural gas and naphtha, in the last fiscal year, which was equivalent to 1 million barrels of crude per day.
