Petrochemical plants’ foreign exchange revenues have reduced and they are losing market share to rivals because their access to natural gas as feedstock has either been totally cut or severely curbed, the head of the Energy Commission of Iran Chamber of Commerce, Industries, Mines and Agriculture said.
“Although there is heavy demand for urea fertilizers all over the globe, Iranian petrochemical sector is lagging behind due to a lack of gas feedstock,” Arash Najafi was also quoted as saying by ILNA.
The farming year has already started in many countries and a large number of farmers are planting crops, meaning the agro sector needs a wide range of urea-based products. However, Iranian petrochemical plants have ceased the production of key commodities [instead of doubling their output] as they do not have access to natural gas, he rued.
Urea demand peaks between November and February, but it cannot be stored in depots.
Najafi said the private sector had warned oil and gas officials about gas shortage 15 years ago, but they turned a deaf ear to the warning.
Daily household gas consumption has exceeded 650 million cubic meters due to the cold weather, resulting in cutting gas supply to other sectors, including cement factories and power plants.
In the past four weeks, feedstock (natural gas) supply to some petrochemical plants was reduced or completely cut off.
Khorasan Petrochemical Company in North Khorasan Province and Pardis Petrochemical Complex in Asalouyeh, Bushehr Province, have reported that their urea and ammonia units have ceased production because gas supplies were discontinued.
Zagros and Kermanshah petrochemical plants have also reported cuts in gas supply.
The volume of natural gas supplied to Mobin, Marjan and Shiraz petrochemical complexes as feedstock has been reduced.
Alternative Feedstock
Although petrochemical units share the same problem as cement factories and thermal power stations in terms of gas shortage, their situation is worse because power plants can use mazut as an alternative feedstock but it is not the case for petrochem factories.
While cement and power plants continue operating by replacing natural gas with liquid fuels such as diesel and mazut, petrochemical companies are forced to stop or lower production since there is no substitute for the gas feedstock.
What is common and regrettable among all three (industrial, petrochemical and power) sectors is that these developments have had adverse consequences.
Using diesel and mazut instead of gas in power plants and cement factories increases greenhouse gas emission.
As more liquid fuels are burnt, more toxic fumes are released into the atmosphere making a bad situation worse as far as air pollution is concerned.
At least seven power stations (Tous and Mashhad in Khorasan Razavi, Neka in Mazandaran, Shahid Rajaee in Qazvin, Sahand and Tabriz in West Azarbaijan and Bandar Abbas in Hormozgan Province) have started using eco-unfriendly mazut to generate power.
Currently, 56 petrochemical plants are active in different regions with an annual output of around 66 million tons, half of which is consumed domestically in various industries and half is exported.
Currently, 350 types of petrochemicals are produced in Iran for which there is high international demand.
Many countries buy Iranian petrochemicals, including neighboring states, China, India, Southeast Asia and Europe.
Shutting down petrochemical units will have a negative effect on local market as well as exports.
The National Iranian Gas Company announced last week that the household gas consumption had reached a record 650 million cubic meters per day.
Domestic gas output reached 950 million cubic meters a day.
The residential sector is the largest consumer (and the top priority), followed by power plants, industries and petrochemical companies.
Almost all households in cities and close to 80% of rural folks are linked to the national grid.
Close to 18 million households in urban areas and 4.5 million families in rural regions are linked to the Iran Gas Trunkline.
Domestic gas consumption has been rising constantly in the cold season.
