Petrochem Revenues Down $3b

Petrochem Revenues Down $3bPetrochem Revenues Down $3b

Concurrent with the decline in oil prices, Iran’s revenues from petrochemical export also reduced by $2.5-3 billion a year, an official in the petrochemical industry said on Saturday.

With regard to the impact of the oil price plunge on revenues earned by petrochemical and polymer products’ exports, Fariborz Karimaei, the acting head of the Association of Petrochemical Industry Corporation, told Mehr News Agency that with the oil price slump from over $100 a barrel to the current $35-$40, the price of petrochemical products also slid downward.

This is while the country is developing 55 major projects, with 10 production units expected to go on stream by March 2017, adding around 6.2 million tons to Iran's total petrochemical output capacity of 60 million tons a year.

Hamid Reza Rostami, NPC's director for planning and development, said on Friday the new units will bring in an additional $2.5 billion in annual petrochemical exports. The units include the second development phase of Karoun, Pardis, Morvarid and Takht-e-Jamshid petrochemical projects, which will significantly boost the production of petrochemicals such as methanol, urea, ammonia, polystyrene and ethylene glycol.

“In the past 18 months, even the value of petrochemical products, which are produced from gas feedstock, has reduced significantly,” Karimaei said.

He added that during this period, the price of methanol dropped from $400 a ton to about $180-185, and urea is being traded at $200 a ton from $350 in the past.  

“The price of a wide range of polymer products also lost half of the previous value,” Karimaei added.

Ali Mohammad Bosaqzadeh, National Petrochemical Company's coordination and supervision director, recently said more than 60% of petrochemical complexes' output are exported.

Bosaqzadeh believes that a drastic decline in oil prices and the subsequent 20% fall in prices caused petrochemical export value in 2014 to be the same as in 2015.

Last year's export value stood at $11 billion.

Karimaei stressed that the global oil price tumble has reduced the value of natural gas in all benchmarks, including Dutch TTF (Title Transfer Facility) Gas Futures, Henry Hub, NBP (National Balancing Point), and consequently, petrochemicals were devaluated. Polymer and petrochemical products, which are produced from oil, also witnessed a sharp slump in prices.

According to Karimaei, the loss of revenues has affected all large petrochemical exporters, including Saudi Arabia and Qatar, to name a few.

According to an NPC report, Iran aims to sell 93 million tons of petrochemicals worth $61 billion under the sixth five-year development plan (2016-21).

In line with the plan, petrochemical projects, worth $37 billion, have been offered to foreign and domestic investors.

Petrochemical products are Iran's second biggest source of income after crude oil.