Oil Minister Bijan Namdar Zanganeh announced that Iran’s petrochemical production by March 2015 will be worth $22 billion, up from $1 billion in 1997.
“The 22-fold growth is a huge step forward. The value of our petrochemical products is expected to exceed $70 billion by 2025 according to Iran’s 20-Year Vision,” he said, stressing that relevant investment should be made to achieve that goal.
Iran’s gas production capacity will increase by 100 million cubic meters with the completion of phase four of the South Pars oil field in the Persian Gulf by the end of the present Iranian calendar year (March 2015).
The addition of another 100 million cubic meters to the gas production capacity over the course of the next year will leave no room for concern over the shortage of feedstock for petrochemicals, he stated. The minister recently had a meeting with players in the petrochemical industry and a reasonable price for feedstock is to be announced within the next three weeks.
“We are ready to formulate a long-term price reliant on the selling price of feedstock by 2025 so that domestic manufacturers will no longer have to deal with the global price fluctuations of petrochemicals.” The minister said the neighboring countries cannot provide investors in the petrochemical industry with enough feedstock, adding that Iran has a comparative advantage in terms of abundance and price of feedstock.
To supply feedstock for petrochemicals, several plants for recycling ethane and C2+ hydrocarbons have been established in phase 12 of the South Pars field, Bid Boland and Parsian gas refineries as well as NGL 3100 and 3200 plants in the Ilam Province. Additionally, several gas to propylene and polyethylene conversion plants will be established.
The price of feedstock for petrochemicals should be set by taking long-term investments into account, according to the Minister of Industry, Mine and Trade Mohammad Reza Nematzadeh. He insisted that long-term prices for petrochemical manufacturers will help increase domestic and international investments.
“Offering annual feedstock prices does not help investors with planning,” said Nematzadeh. “We need downstream manufacturers to focus on exports to be able to curb the sale of raw petrochemical materials and increase value added.”
