Iran’s petrochemical production and exports have registered a 7% and 13% growth respectively in the current fiscal year’s first seven months (March 21-Oct. 22) compared to a year ago, secretary-general of the Association of Petrochemical Employers Unions said.
“Between March and October 2021, major petrochemical complexes produced close to 38.608 million tons of commodities, whereas the figure rose to 41.550 million tons in the same period of the current fiscal year,” ISNA also quoted Ahmad Mahdavi-Abhari as saying.
Petrochem plants exported 17.5 million tons of goods in the seven-month period, indicating a 13% increase compared to last year when the figure was 15.500 million tons, he added.
According to the official, Petrochemical companies increased their contribution to the integrated forex management system, locally known as Nima, by 30% and injected $8.7 billion during March 21-Oct. 22.
Nima is an online platform affiliated to the Central Bank of Iran where exporters sell their forex revenue and companies buy it for importing goods, machinery, equipment and raw materials.
“The petrochem industry accounted for 39.6% [$9 billion] of Iran’s total non-oil exports between March 21 and Sept. 22, which reached $24 billion,” Mahdavi-Abhari said.
“The sector’s nominal output capacity is around 75 million tons, but the shortage of feedstock and lack of a strong presence in global markets do not permit the industry to operate at full capacity. As the weather gets colder, natural gas consumption will rise in the household sector, meaning petrochemical factories will be deprived of the valuable feedstock.”
Feedstock Shortage
Referring to last year’s deficit, the official noted that due to the feedstock shortage, the petrochem sector had to reduce output between December 2021 and March 2022 substantially and the loss of revenues is estimated to be around $650 million during the three-month period.
The nominal production capacity of 67 major petrochemical complexes, mostly concentrated in the cities of Mahshahr (Khuzestan Province) and Asalouyeh (Bushehr Province), is forecast to reach 90 million tons by March 2023, with actual output forecast to reach 42 million tons in seven months.
NPC’s annual output was 3 million tons in 1979, which has now reached 60 million tons.
According to Hassan Abbaszadeh, National Petrochemical Company’s director for planning and development, 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.
He noted that over 30 projects have been planned to reduce the import of petrochemical products worth $1 billion.
With the implementation of ongoing projects, NPC seeks to diversify the range of petrochemical products and help complete the value chain.
Currently, 68 projects worth $35 billion are underway across the country to increase annual petrochemical output by 50 million tons and help develop the downstream sector.
About 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,” he added.
Oil Reserves
The NPC official said Iran has more than 159 billion barrels of oil reserves and about 33 trillion cubic meters of gas in place.
“There are about 5,600 kilometers of coastline in northern and southern Iran, and the presence of numerous ports has facilitated the export and import of various oil, gas, petrochemical and industrial products,” he added.
He announced that the export of petrochemical products is projected to earn $18 billion for NPC by March 2023.
“Close to 43 million tons of petrochemical commodities are expected to be produced in 67 petrochemical companies, of which 33 million tons will be exported,” he said.
Abbaszadeh noted that the total earnings of the lucrative sector (exports and domestic sales) will peak at $25 billion by March 2023, as the industry’s annual production capacity has reached 90 million tons.
“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 that will rise to 2 million barrels per day in 2025,” he added.
With the inauguration of new complexes in the next four years, the number of petrochemical plants will reach 77, marking a rise of 15%.
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.
