Hassan Abbaszadeh told reporters on Sunday on the sidelines of the first Petrochemical Industry Investors Conference that the sector’s export target by the end of the Iranian year 1404 is about $13 billion and expressed hope it would be met. He said more than 98% of petrochemical companies’ foreign exchange earnings have been returned to the country’s economic cycle.

Any small portion returned with delay remains within the 80-day deadline and is under strict supervision, Abbaszadeh said. He added that there have been no problems since 2018 and that repatriation performance this year is better than last year.

Urea removed from semi-raw products list

Abbaszadeh also outlined progress on the country’s first propane dehydrogenation, or PDH, unit. PDH projects use propane as feedstock, and some benefit from better profitability due to their position in the value chain, he said.

The first project, the Salman Farsi PDH, has progressed more than 90% and is expected to come online by June next year. He said the Alai Mahestan and Hirsapolymer Sahand projects are also advancing well, followed by Pars Petrochemical PDH and Bidboland Persian Gulf Petrochemical. Jam Petrochemical and Petro Pardis Sina, which use propane gas from South Pars, are also making progress.

On value-chain development and downstream industries—key goals of the Seventh Development Plan—Abbaszadeh said progress has been solid. Some products had been classified as semi-raw and subject to duties, but revisions were pursued. As a result, urea was removed from the semi-raw list, and duties on products such as polypropylene and PVC were reduced.

Facilitating industry development

Addressing compounds, Abbaszadeh said the issue falls under the Ministry of Industry, Mine and Trade, adding that downstream industries have raised complaints. He said the division of responsibilities between the ministry and the National Petrochemical Company is clearly defined under existing regulations, including a 1997 bylaw, and facilitation is being pursued on both sides.

The National Petrochemical Company’s downstream industries management is active in promoting development, he said, providing feasibility studies to genuine private investors, while the ministry remains the main authority for downstream development.

On the gap between first- and second-market exchange rates and its impact on production and exports, Abbaszadeh said talks with the Central Bank have led to incentives for offering part of petrochemical foreign currency in the second market under specific conditions. Companies exceeding export targets can offer surplus currency in the second market, as can proceeds from products tied to investments in flare gas recovery and some loss-making companies, he said.

Exchange-rate policy rests with the Central Bank, Abbaszadeh said, adding that current measures will apply this year while decisions for next year remain to be seen. He said a request has also been made to allow companies investing in energy efficiency—producing through savings in household gas use—to offer currency in the second market, which is likely to be approved.

Key startups this year

Abbaszadeh said major projects nearing startup this year include the olefin and MEG units at Bushehr Petrochemical and the polyethylene and olefin units at the Kangan petro-refinery, all expected to come online by year’s end.

He added that from the start of the year through October, petrochemical companies provided about 70 trillion rials in credit-based supply to downstream industries and expressed hope the figure would exceed last year’s total. Credit-based supply reached 122 trillion rials last year.

On feedstock supply and winter gas constraints, Abbaszadeh said restrictions were imposed later this year due to a delayed onset of cold weather and adequate liquid fuel storage. Some industries currently face limits, managed on a rotating basis. While no specific figures were provided, he said restrictions are expected to be less severe than last year.