Domestic Gas Supply to Meet 90% of Petrochem Plants’ Needs

Domestic Gas Supply to Meet 90% of Petrochem Plants’ NeedsDomestic Gas Supply to Meet 90% of Petrochem Plants’ Needs

About 90% of gas requirements of petrochemical complexes will be met domestically by the end of the current Iranian year (ending March 20, 2017), director of production control at National Petrochemical Company said on Tuesday.

“With more phases of South Pars Gas Field going on stream and the rise in oil exports, which have reached 2 million barrels per day, the petrochemical industry is expected to face fewer problems regarding feedstock supplies,” Ali Mohammad Bosaqzadeh was also quoted as saying by ISNA.

Underscoring that shortage of feedstock supplies has been a usual problem of petrochemical units, Bosaqzadeh said the shortage has existed before and after the imposition of sanctions because downstream units start operations faster than upstream industries.

Due to the drop in crude oil production, the supply of feedstock gas produced from associated petroleum gases–aka APG—has declined.

Bosaqzadeh referred to the transfer of upstream units to petrochemical industries and added that the move to join upstream units, such as natural gas liquids units, and downstream industries results in more coordination and brings more attention to feedstock shortage at the beginning of the production cycle.

  Foreign and Domestic Feedstock

“Foreign suppliers may offer discounts and concessions to petrochemical customers and their feedstock quality is on a par with that of domestic feedstock, but the overall price for Iranian customers would be higher than that of domestic feedstock because of transportation costs,” he said.

Stressing that some grades of feedstock or petrochemical products are not produced in Iran and need to be imported, the senior NPC official said plans to produce a wide range of products of different grades is on the agenda.

“Most of the Iranian petrochemical complexes have, prior to the imposition of sanctions, obtained quality licenses from European countries, including Germany and France, or even from the US, and mostly operate under those licenses … Thus domestic petrochemical products’ quality is guaranteed,” he said.

Explaining brighter prospects for the industry, the official said demand for petrochemical products has witnessed a rise in international markets, which can bring about fairer prices and cheaper transportation fees, including the easing of money transfer as most of the banking embargos are lifted.

Bosaqzadeh said on Sunday Iran’s petrochemical projects need $77 billion in investment until 2020, which can be materialized “easily”.

“Petrochemical industry is a capital-intensive sector, each project of which requires an investment ranging from $100 million to billions of dollars,” he added.

The official singled out the obstruction of technology transfer to Iranian companies as a significant problem in the sanctions era, adding that during the period, Iran was unable to employ technologies that allow companies to produce materials at lower prices and, at the same time, higher quality.

“Under specific conditions, Iranian companies had to import secondhand technologies,” he said. Bosaqzadeh expressed optimism that in the post-sanctions era, cutting-edge technologies, which are efficient and eco-friendly, will be transferred to the Persian Gulf country.