Obtaining advanced western technologies in the petrochemical sector is now more important for Iran than regaining the lost market share in the US and Europe, a senior official in the National Petrochemical Company said.
“The US is one of the major petrochemical producers,” Ali Mohammad Bosaqzadeh, coordination and supervision director of NPC, was quoted as saying by IRNA.
Bosaqzadeh said the export of petrochemicals from Iran to the US is not feasible.
“The surge in ethane output associated with shale gas production has revitalized the US petrochemical sector by allowing crackers to switch from expensive naphtha-based feedstocks to cheap ethane. As a result, US crackers are now among the most cost-competitive in the world,” he said.
The official said prior to the imposition of US-led sanctions against Iran, the US accounted for 7% of Iran’s petrochemical exports.
“We can revive this market when sanctions are lifted, but that would be difficult in view of the recent competitive market conditions,” he said.
By importing state-of-the-art technology from western countries, petrochemical complexes in Iran would be completed and new units would come on stream. There are currently 67 semi-finished projects with a capacity of 60 million tons, the completion of which requires an investment of $36 billion.
Europe a Priority
A shorter distance, which brings down transportation costs, and a less competitive market in Europe make it a more viable target for Iranian petrochemicals, as opposed to the US, according to the official.
European companies held negotiations with Iran in the wake of the landmark nuclear deal reached between Iran and the six world powers on July 14, which will result in the removal of sanctions in exchange for restraints on the country’s nuclear program.
“European firms can provide Iran with latest technologies for producing higher volumes of alloys with greater durability,” Bosaqzadeh said.
A well-established Austrian company has also expressed readiness to invest in Iran’s petrochemical sector. To this end, the company has been in talks with the National Petrochemical Company over the past weeks.
The Austrian firm is willing to provide Iran with funding and technology, and will implement the projects on the basis of an engineering, procurement, construction and financing contract.
“Having both gas and gas condensate as feedstock for petrochemical complexes, Iran has a distinctive advantage to develop its petrochemical industry,” he added.
Petrochemical industry is the biggest source of foreign earnings for Iran after oil. Iran exported 5 million tons of petrochemical products during the first three months of the current Iranian year (started March 21) valued at $3 billion. The country exported 25 million tons of petrochemical products worth $14 billion last year.
Currently, 45 petrochemical units produce around 60 million tons of products, accounting for 36% of the total non-oil exports. According to global estimates, Iran holds 24% of Middle East’s and 4.2% of the world’s petrochemical production capacity.
