Iran's petrochemical exports in the first half of the current fiscal year (March 21-Sept. 22) increased by 94%, the National Petrochemical Company’s director for planning and development said.
“NPC exported products worth $7 billion in the six-month period while the figure in the same period of last year was a meager $3.6 billion,” IRNA also quoted Hassan Abbaszadeh as saying.
“The total value of petrochemical exports is projected to reach $14.5 billion by March 2022,” he said.
“NPC’s annual output was 3 million tons in 1979, which has now reached 90 million tons.”
According to the official, 920,000 people are active in the industry and a rise in NPC’s production by 1 million tons can create jobs for at least 170,000 more people.
Abbaszadeh noted that over 30 projects have been planned to reduce the import of petrochemical products worth $1 billion.
“Annually, about $1.5 billion worth of petrochemical products are imported. Nevertheless, with the help of 33 development projects, their import will reduce by 70%.”
With the implementation of these projects, NPC also seeks to diversify the range of petrochemical products and help complete the value chain in the petrochemical sector.
Currently, 50 projects are underway across the country to increase petrochem output and help develop the downstream sector.
The annual production capacity of Iran's petrochemical industry will soon reach 100 million tons per year from the current 90 million tons per annum and plans are underway to boost the same to 135 million tons in six years.
The petrochemical industry has played a key role in Iran’s economic growth, as it creates value-added and reduces the sale of oil and gas on which the economy has been dependent for decades.
With abundant hydrocarbon reserves and new private sector investments, Iran is working hard to maintain its global status in the key sector and broaden its scope.
In related news, Behzad Mohammadi, managing director of NPC, has announced that annual revenues from the petrochemical industry will reach $50 billion by 2027.
Petrochem Feedstock
According to NPC, 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. The figure is expected to surpass 2 million barrels per day in six years.
Almost 60% of the petrochemical projects are in Asalouyeh and Mahshahr in southern and southwestern Iran, and the rest are scattered nationwide.
Among the sectors affiliated to the oil industry, the petrochemical sector is the most important one because it produces the most added value.
“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,” Mohammadi said.
“Exports earned $10 billion while 8 million tons of petrochemicals worth $5 billion were sold in the domestic market.”
Demand for oil derivatives rises by 0.9% per year globally while the figure stands at 5% for petrochemical products, which indicate the importance of the strategic sector.
“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.
Reports indicate that 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.
Local Sales
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,” he added.
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, Mohammadi said, adding that the growth in demand means petrochemicals would account for over a third of 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).
