The 67 petrochemical companies in Iran produced 35 million tons in the last fiscal year that ended on March 20, 2021, of which 27 million tons were exported, managing director of National Petrochemical Company said.
“Exports earned $10 billion. Moreover, 8 million tons of petrochemicals worth $5 billion were sold in the domestic market,” the Oil Ministry’s news service also quoted Behzad Mohammadi as saying.
Demand for oil derivatives rises by 0.9% per year globally while the figure stands at 5% for petrochemical products, indicating the importance of the strategic sector, he added.
According to the official, petrochem plants across the country received 40 million tons of feedstock, including condensates, ethane, natural gas and naphtha in the last fiscal year that was equivalent to 1 million barrels of crude per day.
“This will rise to 2 million barrels per day in 2025.”
With the inauguration of new complexes, the number of petrochemical plants will reach 77 over the next four years, up 15% compared to 2021.
The NPC chief went on to say that “studies show we are facing a shortage of propylene (200,000 tons) and if no action is taken the deficit will grow to 700,000 tons in five years”.
Propylene is a strategic commodity and can be transformed into value added products like polypropylene and create jobs in the downstream petrochemical sector.
To ease the growing shortage, a development plan has been drawn up for raising annual propylene production to three million tons.
“The plan will be implemented in three regions in the south, west and north of the country.”
“NPC has invested close to $80 billion in petrochem plans over the past four decades,” he said, adding that $25 billion are expected to be invested in the key sector in the next four years.
The NPC chief noted that petrochemical revenues from exports and domestic sales in seven years exceeded $110 billion.
“Of the total earnings, $80 billion included exports worth $30 billion,” he said.
Published reports say 67 petrochemical companies contributed 40% of the currency traded in the secondary foreign exchange market, known locally as Nima,
Nima is an online platform affiliated to the Central Bank of Iran where exporters sell their overseas currency income and companies buy for importing machinery, equipment and raw materials.
“As petrochemical production rises, less crude oil will be exported,” Mohammadi said, announcing that local sales have risen by 700,000 tons compared to a year ago.
Unlike other major industries that have not grown over the last two years primarily due to the US economic siege, petrochemical output has risen by 30% and production capacity is near 80 million tons a year.
“Almost 90% of the petrochemical firms performed beyond their financial commitments pertained to repatriating export earnings.”
Based on CBI rules, exporters are required to sell at least half of their export revenues in the secondary market at exchange rates below the (higher) rates in the open market.
For petrochemical companies, this obligation reaches 60%.
Petrochemicals are rapidly becoming the largest driver of global oil demand, he recalled, adding that the growth in demand means petrochemicals would account for over a third of the growth in oil demand to 2030, and nearly half in 2040.
Petrochemical factories in Iran are projected to consume an additional 56 billion cubic meters of natural gas by 2030, equivalent to about 20% of annual gas consumption now (255 bcm).
