An integrated methanol consortium is of high importance in light of the looming US sanctions against Iran’s oil industry, said the National Petrochemical Company managing director, Reza Norouzzadeh.
He was speaking in Tehran last week at the second Seminar of Methanol Producers in which executives from petrochemical companies, state officials and methanol manufacturers attended to discuss cooperation, and study the supply and demand situation, factors affecting methanol prices and the impact of US sanctions on the methanol industry.
According to NPC news agency NIPNA, Norouzzadeh, a deputy oil minister, voiced support for developing methanol projects by facilitating feedstock supply for methanol plants.
"With the recently launched petrochemical complexes, including Marjan, Kharg, Fanavaran, Kaveh and Zagros, Iran now produces 6.6 million tons of methanol per annum of which 400,000 tons are exported," he said
Six more methanol projects under construction will come on stream by 2020 and add 12 million tons to the total annual output, he said.
NPC data show Iran accounts for 8% of the world's total methanol production and its exports are seen in international markets mainly in Iraq, China, the UAE, India and South Korea.
Last fiscal (March 2017-2018), Iran’s methanol export to international markets amounted to over $1 billion (the USD rate then stood at 35,000 rials).
According to data from statistical agency Eurostat, Iran methanol exports to European states including Italy totaled 128,942 tons in 2017, which was a 43% year-on-year increase and the highest level since 2011.
Availability of relatively cheap feedstock combined with demand from Asian countries, has contributed to the growth of Iran's methanol production during the last decade.
However, the new US oil sanctions could delay implementation of the ambitious methanol projects on the back of technology and investment constraints, and hinder methanol exports amid banking and currency restrictions.
Norouzzadeh stressed the need for domestic methanol companies to rise to the occasion under the existing challenges and do all they can to protect their share in the international market.
China, which has major methanol-to-olefins capacity, is a natural target market for Iranian supplies. Its top five importers account for 60% of Iranian methanol with three purchasing molecules for the production of olefins.
However, Chinese companies are also citing banking difficulties in trading with Iran due to the US penalties imposed after President Donald Trump abandoned the Iran nuclear deal in May and reimposed economic sanctions.
In the petrochemical industry methanol is used to create numerous high-quality basic chemicals. In terms of quantity, the most important are formaldehyde, acetic acid, MTBE, methyl methacrylate, methyl chloride and methylamines, which are in turn themselves processed to produce further derivatives.
