Iran Plast to Help Expand Global Petrochem Reach

Energy Desk
Iran Plast to Help Expand Global Petrochem ReachIran Plast to Help Expand Global Petrochem Reach

The 10th International Exhibition of Plastics, Rubber, Machinery and Equipment (Iran Plast 2016) will help boost Iran's market share in the regional and global petrochemical markets, managing director of the National Petrochemical Company said on Monday.

"We are planning to use Iran Plast 2016 as a platform to expand our reach in four major petrochemical markets in the region, namely Iraq, Afghanistan, Turkmenistan and Pakistan," Marzieh Shahdaei said in her first news conference in the current Iranian year (started March 20).

Referring to China and India as the biggest traditional customers of Iran's petrochemical output, Shahdaei said NPC is taking steps to hold exhibitions in the four neighboring countries to promote Iran's wide range of petrochemical products.

Iran Plast 2016 will open at Tehran's International Permanent Fairground on Wednesday in the presence of senior Iranian officials, including First Vice President Es'haq Jahangiri and Oil Minister Bijan Namdar Zanganeh.

The five-day exhibit is largely focused on downstream oil sectors such as rubber and plastic industries.

It will host around 400 domestic and 500 international companies from 25 countries, including from Russia, France, China, Turkey, the UAE, Pakistan, South Africa and Australia, with petrochemical heavyweights from Germany, Italy and Austria having reserved the largest pavilions in the exhibition.

In addition, 18 trade delegations involving about 200 businessmen from Iraq, India, the UAE, Azerbaijan, Sri Lanka and Kenya, among others, are scheduled to visit Tehran to test the waters for new business opportunities.

"Global Business" has been chosen as the official motto of the biennial event, in line with Tehran's plans to become a key player in the global petrochemical industry now that it is unshackled from most western sanctions.

Shahdaei, who took the helm of NPC in February, said Iran Plast is a window of opportunity for marketing, transfer of technology and raising foreign investment in a downstream sector that is reeling from years of underinvestment due to international sanctions.

"Developing the downstream sector is essential for completing the value chain in the petroleum industry," she said, adding that it has significantly higher value added and creates more jobs compared to the upstream sector, i.e. oil and gas exploration and production.

--- Regional Competition

Iran is currently trailing Saudi Arabia's petrochemical industry valued at nearly $50 billion, according to the NPC chief who particularly blamed sanctions for the setback.

But she argued that international firms see Iran's post-sanctions petrochemical sector as an increasingly exciting area for investment because of the presence of expert contractors and workforce, as well as advantages such as abundant high-grade natural gas as feedstock and easy access to international waters.

As part of efforts to ramp up petrochemical output in Iran, NPC is planning to build townships around small production units, including a polyethylene production plant in Ilam and other small-scale projects in Kermanshah and Kurdestan provinces.

In addition, the NPC aims to launch a plethora of new production units stretching from Asalouyeh—Iran's petrochemical heartland—all the way to the country's second petrochemical hotspot Bandar Mahshahr in the south, covering an area of more than 550 kilometers.

The state-run NPC is the chief Iranian organization tasked with planning and policymaking in the petrochemical industry. But the litmus test for NPC lies in turning Jask Oil Terminal in the Persian Gulf into a Middle East petrochemical hub.

Many international vessels load Iran's crude oil from Jask, which is situated on the country's Makran Coast stretching along the Sea of Oman. In February, Iran made its first oil shipment to European markets after the lifting of sanctions from Jask, loading three international tankers with 4 million barrels of crude.

--- Business With Internationals

"France's Total and three German companies are in negotiations to launch major petrochemical projects in Iran," Shahdaei said, without naming the German parties.

NPC and Total signed a memorandum of understanding last month to jointly build a petrochemical complex in southern Iran to produce a host of new petrochemical products in Iran.

But details of the undertaking with Germans have been kept under wraps. Shahdaei paid a low-profile visit to Germany last week, apparently linked to talks on the petrochemical project.

"Most European companies say they will do the marketing for petrochemicals produced in joint ventures in Iran," she said.

This will dramatically release Iran of marketing and export hassles for large volumes of petrochemicals destined for offshore markets.

With a nominal production capacity of 60 million tons, Iran's petrochemical output reached 44 million tons in the last Iranian year.

The country is developing 55 major projects, with 10 production units expected to go on stream by March 2017, adding at least 7 million tons to the annual output.