Energy, Economy

Iran Targets 55m Tons of New Petrochemical Capacity

NPC Targets 55m Tons of New Petrochemical CapacityNPC Targets 55m Tons of New Petrochemical Capacity

Iran is pressing ahead with the construction of a string of new petrochemical ventures to become a leading player in the regional petrochemical market and make more profit of its massive hydrocarbon resources, the head of the National Petrochemical Company said.

“Iran is working on 56 petrochemical projects, which will add an estimated 55 million tons of petrochemicals to annual production capacity upon their completion,” Marzieh Shahdaei was also quoted as saying by NIPNA on the sidelines of a four-day exhibition of Iranian goods and services in Istanbul, Turkey, on Wednesday.

Iran's annual petrochemical production capacity is estimated at 62 million tons. The country is keen to reach current Saudi petrochemical output capacity in three years and push the capacity further up to 110-120 million tons by 2022. NPC is aiming for 72 million tons in annual capacity by March 2018, the end of the present fiscal year.

Exhibitors in the Iran Solo Exhibition (Oct. 25-28) include representatives of Iranian companies in a wide range of sectors, such as energy, oil, gas and petrochemicals. Shahdaei noted that once the new ventures are launched, Iran will become the largest petrochemical producer in the Middle East, surpassing Saudi Arabia with an output capacity of close to 100 million tons per year.

The official had previously said the rapid expansion of Saudi Arabia in the petrochemical sector is a real challenge that is emerging as a "hazard" to Iran's market share.

According to Shahdaei, Iran launched 11 petrochemical plants in the last fiscal year (ended March 20, 2017) and is due to complete five others, with about 2 million tons of production capacity, over the next few months. Iran burns or exports most of its fossil fuels after extraction, but the country is making efforts to produce more oil and gas-based chemicals and petrochemicals that generate higher value added.

“Following the lifting of sanctions in early 2016, NPC opened talks with several international giants and signed preliminary agreements on petrochemical development and finance,” she said.

Shahdaei noted that negotiations are underway with Asian and European banks and financial institutions, which are to shoulder the lion’s share of funds needed to expand Iranian petrochemical sector.

Having access to huge natural gas reserves, sharing a coastline with Persian Gulf and Sea of Oman, and its location in the vicinity of international markets have given the state a competitive advantage and encouraged foreigners to transfer modern technology to Iran.    

On the indigenization of cutting-edge technologies in the sector, Shahdaei stressed that Iran is currently pursuing a plan to produce propylene from methanol.

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