The second phase of Kangan Petro Refining Company in Bushehr Province, the construction of which is underway, is expected to come on stream by 2024.
This phase includes an ethylene plant, which is to help complete the value chain of the company’s products, the Oil Ministry’s news agency Shana reported.
Located on a 15-hectare plot in Kangan County on the coast of Persian Gulf, the plant is now over 70% complete.
The plant is to produce propylene, polypropylene and high-density polyethylene.
Ethylene and its byproducts are used as building block materials for a variety of products, including plastics, detergents and adhesives.
Iran is making efforts to increase the output of ethylene and other olefins due to rising domestic and foreign demand.
According to a recent report, global ethylene consumption is predicted to have grown by 4.3% annually from 2014 to 2020 and it is forecast to increase by 3.4% from 2020 to 2028.
North America accounts for 24% of global ethylene consumption and is the largest consumer of this product worldwide. China, the second-largest consumer of ethylene, accounts for 18% of global ethylene consumption. The Middle East, the third-largest consumer worldwide, accounts for 18% of global ethylene consumption. Demand is forecasted to reach 233.9 million tons in 2028, rising at a CAGR of 3.4%, during 2020-28.
There are several factors driving the growth of the market, including an increase in consumer goods sales, a consumer goods industry in flux, escalating packaging costs, increasing alcohol consumption and growing urbanization.
Market growth, however, will be slowed by fluctuations in ethylene prices, ethylene oxide's hazardous effects and government regulations. There are some notable trends in the petrochemical industry, the growing production capacity of ethylene dichloride and the increasing demand for bio-based polyethylene.
In Iran, more than 30 petrochemical and chemical companies are producing such products and more projects will come on stream in the near future.
First Phase
The first phase of Kangan Petro Refining Company was launched last February. Basically a natural gas liquid recovery plant, it seeks to underpin the sustainable supply of feedstock to petrochemical plants in the region.
Costing $1 billion, the processing facility has an annual production capacity of 3.5 million tons of NGLs and helps with the development of downstream petrochemical sector.
Constructed on a 65-hectare plot of land, the project has created jobs for more than 1,000 people in the southern province.
The NGL processing plant receives 21 million tons of natural gas as feedstock per year from Phase 12 of the South Pars Gas Field in the Persian Gulf for producing 2 million tons of ethane, 1 million tons of propane, 500,000 tons of butane and 250,000 tons of pentane annually.
Exporting the commodities to international markets can generate at least $1 billion a year in revenues for KPRC.
NGLs are a group of hydrocarbons, including pentane, ethane, propane and butane. These are differentiated from one another by the number of carbon atoms in their molecular chain. They have a wide variety of applications ranging from specialized fuels (e.g., propane, butane) to petrochemical feedstock for making products like plastic and fertilizers.
To help boost annual NGL feedstock supply by 14 million tons, six projects costing $7.5 billion are in different stages of construction and will come on stream by 2023.
Petrochemical companies in the country produced over 60 million tons of products last year, which was about 10% more than the previous year.
Petrochemical plants manufacture 333 grades of polymers, plus 40 types of chemicals.
Close to $7 billion were invested in the sector in the past six years. Of the total annual output, 35% are bought by local companies and converted into value-added products and the rest is exported.
