Rouhani said 17 more petrochemical projects would come on-stream by next March, calling on the private sector to invest in Iran’s downstream projects.

He cited a promise from Minister of Petroleum Bijan Zangeneh about the startup of 17 petrochemical projects by next March, adding that the new projects would double Iran’s revenue from petrochemical exports to $25 billion.

Rouhani said Iran would see its petrochemical income reach $37 billion in the third jump.

“In the petrochemical sector we would need another jump, which is downstream jump. As there are diverse petrochemical products, the downstream petrochemical sector could also create many jobs,” he added.

Rouhani said the government would call for the private sector to invest in the downstream development of the 17 projects that would come online in the current calendar year “because of high job creation and higher revenue”.

He said: “We would be witnessing a major change in this sector.”

Historic Output Hike

Minister Zangeneh said the Miandoab petrochemical plant was the first of second-jump petrochemical plants to have come online.

“With the inauguration of 17 petrochemical plants in 2020, the production capacity of this industry will increase 25 million tonnes, which will mark the most historic production hike in the history of Iran’s petrochemical industry,” he said.

“Furthermore, with the materialization of the second jump in the petrochemical industry by March 2022, the production capacity of this industry will reach 100 million tonnes, worth $25 billion,” he added.

Zangeneh said the third jump in the petrochemical sector had also started. “Some of the third jump projects are under way with satisfactory physical progress and some others are in the phase of preparation. The third jump projects would bring the value of petrochemical products to $37 billion,” he added.

The minister said 16 of second jump projects were planned to come online this year.

“Once all the 16 projects come online, the petrochemical production capacity will increase from the current 66 million tonnes to 90 million tonnes, up 35%,” Zangeneh said.

Bringing a total of 27 petrochemical projects into operation by March 2022, which marks the end of the second petrochemical jump, would raise Iran’s petrochemical production capacity to 100 million tonnes with a total revenue of $25 billion. In the third jump up to 2026, another 27 petrochemical projects would become operational to bring Iran’s production from 100 million tonnes to 130 million tonnes.

Zangeneh touched on supplying feedstock to downstream units along with developing petrochemical projects, saying: “With a view to increasing the capacity of downstream units, projects have been defined in the methanol, PP, ethylene and benzene chains for accelerating development and diversity in the downstream industries.”

Petchem Projects

A group of new projects, known as driver projects, are focused on increasing petrochemical production capacity and diversity, the two sectors set to prove challenging for Iran. In the PP production sector, Iran is faced with 200,000-tonne shortages. Iran is currently producing about 980,000 tonnes of PP. Demand for PP is set to reach 700,000 tonnes in coming years and therefore Iran plans to bring its PP production capacity to 3 million tonnes from methanol and natural gas as envisaged by National Petrochemical Company (NPC). Iran has already mastered knowhow for converting methanol to PP.

Behzad Mohammadi, CEO of NPC, has said that Iran’s petrochemical production capacity would reach 23 million tonnes by 2024, which would create a good opportunity for methanol conversion to PP.

Gas-to-Propylene (GTPP) projects with a view to carrying PP to northern and northeastern provinces for developing downstream industries using Iranian knowhow are among the driver projects.

The first GTPP project using Iranian knowhow is under way in Eslamabad Gharb by NPC, which would come online by 2025.

Iranian Catalyst

The Miandoab petrochemical plant is the 15th plant producing a variety of LDPP, HDPP and LDLPP on WEP.

Davoud Reza Rabbani, CEO of Bakhtar Petrochemical Company, said similar plants used until recently to import catalysts.

He said that 10% of the revenue gained from petrochemical exports is guaranteed by the Bakhtar Petrochemical Company. The share is set to reach 15% by next year.

The Bakhtar Petrochemical Company has seven petrochemical offshoots including the Kavian Petrochemical Company; the largest olefin production unit in Iran.Most petrochemical plants located on the WEP route have been hived off to the Bakhtar company.

A review of global and regional offer and demand for PE products shows that following the Covid-19 outbreak, the market is faced with increased demand for packaging products and subsequently increased demand for PE products, particularly film grades.

Market analysts believe that in case the coronavirus spread subsides in the world, demand for various PE grades would increase in the mid-term and long-term as health protocols change and more products would need packaging. Therefore, building and developing PE units for the purpose of meeting domestic needs and boosting exports would remain economically viable.

Permits have recently been given for three new PE projects. The Persian Gulf Petrochemical Industries Company (PGPIC) has announced the planned construction of a 300,000-tonne PE plant near the Gachsaran Petrochemical Plant.

By implementing a project to boost the ethylene production capacity at Arya Sasol Polymer Plant by 10%, operations have started for building a 300,000-tonne PE production unit.

By connecting the Tabriz Petrochemical Plant to WEP, a plan is under way to build a 310,000-tonne PE plant in order to allow for three new PE projects in the petrochemical sector.

The Miandoab petrochemical plant would need 140,000 tonnes of ethylene and 2,000 tonnes of butane-1. Ethylene will be supplied by WEP and butane-1 from other petrochemical plants. The products of this plant would serve as feedstock for manufacturers of pipes, plastics and cable among other products.

The Miandoab plant, whose construction started in 2013 on 22 ha of land in the city of Miandoab, is under Japanese Mitsui license. 70% of its share is owned by the Bakhtar Petrochemical Company and 30% by the Pushineh Methanol Company.

Courtesy of Iran Petroleum