Bouali Petrochemical Complex on Cost-Cutting Mission

A melted down unit of Bouali complex after fire in July 2016A melted down unit of Bouali complex after fire in July 2016

Iran's Bouali Petrochemical Complex is taking measures to cut down costs on logistics operations as part of the company's belt-tightening program, after it was hit by a massive blaze last year.

Mehdi Qarouni, Bouali's chief executive officer, says his company is expected to save around $2 million a year on shipping expenses for feedstock, NIPNA reported.

Located in Bandar Mahshahr, Khuzestan Province, the company has held a tender for handing over the shipping operations of its feedstock from Asalouyeh, a port city 570 kilometers southeast of Mahshahr that is home to Iran's largest gas production and processing facilities.

"We have reduced shipping costs to $300,000-303,000 from $350,000 for each consignment of gas condensate," Qarouni said ,without naming the winner of the tender.

"The Bouali complex receives nearly 50 condensate shipments annually. By saving around $40,000 per shipment, the company can cut costs by around $2 million per annum."

Most tankers transporting Bouali's feedstock have a storage capacity of 20,000 to 40,000 tons, "but loadings with higher tonnage are economical for Bouali", he added.

Qarouni noted that condensate shipments from Asalouyeh account for half of Bouali's feedstock requirements.

The complex is recovering from a blaze that caused damages worth about $110 million in July last year. Regarded as one of the worst incidents in Iran's petroleum industry, the fire blazed for three days before it was extinguished. Bouali Petrochemical Complex has an annual production capacity of 1.25 million tons with exports to Persian Gulf littoral states, Europe, North Africa and Southeast Asia.

Players in Iran's petrochemical industry are looking forward to more underlying measures to reduce shipping expenses.In a statement  this month, Mehdi Sharifi-Niknafs, managing director of Iran's Petrochemical Commercial Company, called for establishing a standalone shipping line to handle Iran's petrochemical exports.

Last year, domestic companies paid $1.5 billion for the shipment of petrochemicals and polymers. That amounts to about 15% of Iran's revenue from petrochemical exports in the previous fiscal year that reached over $9.5 billion. Data show Iran sells 30-35 million tons of petrochemicals, polymers, liquefied gas and condensates annually.


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