Petrochem Output to Rise 6m Tons

Petrochem Output to Rise 6m TonsPetrochem Output to Rise 6m Tons

Plans have been devised to increase production capacity of petrochemical complexes by 6 million tons in the current Iranian year (started March 20, 2016).

“The production capacity will rise from 46.33 to 52.33 million tons, which will translate into a drastic step to pursue the policy of selling higher value added products," Marzieh Shahdaei, managing director of National Petrochemical Company, told Shana.

Shahdaei believes that all sectors in the petrochemical industry should help complete the value added chain so as to manufacture goods that can generate more revenues for the country compared to selling low value crude. According to the official, Iran's petrochemical units are capable of bringing an end to exporting crude or natural gas, as it can transform them into commodities whose profit margin is much higher.

Pointing to the potential production capacity of 60 million tons in petrochemical units, she noted that as the South Pars new phases go on stream, more units will be provided with the much-needed natural gas as feedstock to boost production.

"Fifty-five projects are being undertaken and plans call for the development of 28 initiatives. Moreover, production capacity will reach 160 million tons in a 10-year period and various materials will be exported to destination markets across the world after satisfying domestic needs," she said.

Commenting on the necessity of collaborating with domestic private sector as well as foreign investors, she noted that establishing and improving infrastructures are among other strategic plans to achive long-term petrochemical goals.

Asked about Masjed Soleiman Petrochemical Plant, Shahdaei said, "Completion of the project will play a major role in revolutionizing the economy of Khuzestan province."

  NPC Revenues

Giving a breakdown on NPC’s revenues, Hamid Reza Rostami, NPC's director for planning and development, said the value of last year’s domestic sales stood at 13.5 million tons worth $7.5 billion while 18 million tons worth $9.5 billion were exported.

According to reports, Qaed Basir, Iran Carbon, Rejal, Shiraz, Nouri, Poly Nar, Laleh, Kermanshah, Bisotoun, Marun, Bouali Sina, Shazand and Jam petrochemical complexes experienced the highest production rates last year.

On NPC's achievements, officials have already stressed on 4% rise in production efficiency, 18% increase in exports and the launch of new projects during 2015 in comparison to those of 2014.

  Serious Threat

According to Fariborz Karimaei, the acting head of the Association of Petrochemical Industry Corporation, the US is a real threat to global petrochemical markets as petrochemical prices will suffer a drastic decline when cheap American polymers arrive in the market. Karimaei believes that the US access to unconventional natural gas resources like Shale gas has dramatically raised its natural gas production capacity to be used as feedstock in petrochemical units.

"A plethora of investors have shown interest in embarking on petrochemical projects," he said. Based on projections, the US will saturate the market with its polymer and petrochemical commodities in the next five years. The abundant supply will lead to dumping in a traditional market where Iran is doing its best to retake its lost share.

Karimaei noted that increasing production capacity and diversifying export markets should top NPC's macro policies.

"Such objectives cannot be accomplished unless plans are made to attract foreign investment by developing petrochemical infrastructures and cutting red tape to facilitate cutting edge knowledge transfer to Iran," he said.

"Concurrent with the decline in oil prices, slumping from over $100 a barrel to the current $35-$40, Iran’s revenues from petrochemical export also reduced by $2.5-3 billion a year."