Iran's nominal petrochemical production capacity will reach 62.6 million tons this year, National Petrochemical Company's planning suggests.
With a hike in ethane production, coming from incomplete phases of South Pars Gas Field, petrochemical production will exceed 50 million tons, Shana reported.
Though a milestone, the figure is far below what was envisaged for the industry. The Fourth Five-Year Economic Development Plan called for an expansion of petrochemical output to 56 million tons per year by 2010.
But the target was never reached and in 2010 sanctions against Iran intensified, worsening future prospects for the petrochemical industry. In fact, the industry was one of the worst hit by economic sanctions leveled against Iran's nuclear energy program.
NPC and privatized petrochemical producers—being the heavy weights on Iran Fara Bourse (over-the-counter market)—experienced a decline in production capacity, as they were prevented from buying parts to maintain their installations and exporting their products.
$22b in Revenues
Of the total production, 17.5 million tons were exported and 17.7 million tons were sold to domestic customers.
NPC estimates total petrochemical exports to hit $11 billion while domestic sales are estimated to reach 334 trillion rials ($11.1 billion at official exchange rate). This brings the total value of petrochemical sales to exceed $22 billion for the Iranian year ending March 2016.
National Petrochemical Company, a subsidiary of Iran's Oil Ministry, is responsible for the development and management of the petrochemical sector.
NPC is the second largest producer and exporter of petrochemicals in the Middle East. Over these years, it has not only expanded the range and volume of its products, but has also taken steps in areas such as R&D to achieve more self-sufficiency.
Increasing Exports
Iran's petrochemical exports will increase, once sanctions against Tehran's nuclear program are removed as part of Iran's historic deal with the West.
P5+1—USA, China, Britain, France, Russia and Germany—reached a deal with Tehran in Vienna on July 14, which would lift sanctions imposed on Iran in exchange for curbs on its nuclear energy program.
However, Iranian merchants can lie low for now, as conditions will prevail until early 2016. The deal has been adopted into a resolution by the United Nations, but the US Senate still has to sign off on it. Furthermore, sanctions will be lifted after the International Atomic Energy Agency verifies Iran's fulfillment of its nuclear commitments.
Lucrative Investment
The prospect of normalized financial relations with the world has had UAE companies scrambling to strike deals in Iran's petrochemical industry.
"Iran has turned into a key priority for anyone involved in Middle East petrochemicals trade," said Eduardo van-Zeller Neto, Dubai-based partner and head of oil and chemicals, Middle East, at Roland Berger Strategy Consultants.
"The representative of Iranian petrochemical companies has been visiting Dubai in the past six months to establish trade roots for when the sanctions are lifted," Shana quoted an Iranian businessman as saying.
