State Funding for Petrochem Industry a Must

State Funding for Petrochem Industry a MustState Funding for Petrochem Industry a Must

The private sector active in the petrochemical industry has nowhere near the necessary financial resources to fund developmental projects. The government and parliament need to collaborate in funding to rejuvenate the industry, Ali-Mohammad Bosaghzadeh, director for production control at the National Petrochemical Co (NPC) said.

Optimizing domestic manufacturing of petrochemical products is an effective way to bypass the international sanctions is. Sanctions can only take a serious toll if the economy is export-dependent. "With a consolidated, self-sufficient economy relying mainly on internal production, sanctions would not be as subversive" Shana quoted him as saying.

Indigenizing foreign licenses for the petrochemical industry has also proven effective, the official said, adding licenses for manufacturing ammonium and methanol have been indigenized by the Petrochemical Research and Technology Company. "The process needs to be sustained."

International sanctions may have motivated several of the country's private companies to use indigenized licenses, however, the necessary conditions should be provided to encourage their use, when and if the sanctions are lifted. Firms need to be assured that they can trust the NPC. By purchasing their stocks for new projects; NPC could win the companies' trust, the official noted.

After the 1980-1988 Iran-Iraq war, the petrochemical industry developed to a fair degree. It is predicted that once the current sanctions are lifted, with the introduction of cutting-edge technologies and collaboration of foreign firms the industry will expand further. The required context for such intensive transformation should be laid out, the official stressed.    

The essential prerequisites for creating a competitive environment for investment and development of the petrochemical industry, is the availability of feedstock at viable prices including natural gas, ethane, naphtha, and natural-gas condensates.

Despite the existing challenges, Iran's petrochemical industry has moved forward during the past years. The country's gas processing and transportation capacities currently sit at 600 million cubic meters per day. This is expected to increase up to 1000 million cubic meters in the near future.

In line with the 'economy of resistance', a policy proposed by the Leader of the Islamic Revolution Ayatollah Seyyed Ali Khamenei to counter the sanctions, promote domestic growth, and reduce consumption, the petrochemical industry plans to reduce raw material sales and instead manufacture products with higher added value.