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Petrofarhang Seeks to Raise Methanol Output, Create Value Added

Petrofarhang Holding Company intends to increase methanol output capacity and complete methanol value chain to create added value by building new methanol units to produce polyolefins and polypropylene, managing director of the company said.

“The current capacity of methanol production in Iran is 14 million tons per year, which is planned to exceed 20 million tons by 2024,” Marzieh Shahdaei was also quoted as saying by the National Petrochemical Company’s news portal Nipna.

Petrofarhang, a subsidiary of the Teachers’ Investment Fund, has invested in 13 still under construction.

“The company has four methanol production units. Middle East Kimia Pars Petrochemical Company was launched last year. Sabalan Petrochemical Plant was officially inaugurated last week and two more projects, namely Dena and Siraf, will become operational in the next two years, helping raise the country's methanol output capacity,” she said.

“With the launch of Dena and Siraf plants, Petrofarhang will have a methanol production capacity of 6.6 million tons in the country and it will become the largest methanol producer in the world.”

Middle East Kimia Pars Petrochemical Company and Sabalan Petrochemical Plant are both located in Asalouyeh, Bushehr Province, and annually produce 1.6 million tons of methanol each.

Dena methanol plant in Asalouyeh will also have an annual production capacity of 1.6 million tons and Siraf will produce the same volume in Dayyer County, Bushehr Province.

 

 

Completion of Value Chain

Shahdaei said the goal is not only to produce methanol, but also to complete the value chain of methanol, while the production of polyolefins and polypropylene has been planned in Chabahar in the southeast and Maku in the northwest.

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 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.

Methanol export revenue in 2020 surpassed $2 billion.  

Speaking about the global methanol market, Shahdaei said, “China consumes 67% of the world's methanol output and it 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 $200 per ton to China where it is converted to propylene and sold for $1,200 per ton. 

China, which has a large methanol-to-olefin capacity, is a natural target market for Iranian supplies.

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 basic 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.