During eight years of Bijan Zangeneh serving as minister of petroleum, a total of 32 petrochemical projects have come online.

Addressing the inauguration ceremony, Rouhani said Petroleum Ministry had been a leading driver in national development, noting that growth and development had grown into the dominant discourse in the country.

“May 19 marked the anniversary of the 2017 presidential election. Nobody imagined at that time the heavy burden this administration would have to bear. Over these four years, we were drawn into the largest economic war. Nobody had predicted a pandemic, unseen in a century,” he said.

Petchem Jump

Rouhani said: “As we had promised, we inaugurated 17 petrochemical projects from April 2020 to May 2021, which is unprecedented in the history of Iran’s petrochemical industry.”

Noting that the petrochemical projects inaugurated were in reaction to the US sanctions, the president said: “These inaugurations show that the Iranian nation is resilient and sanctions cannot block its development and progress.”

“If someone has not followed the inaugurations and learns about them he would wonder how 17 petrochemical projects have come online against the backdrop of sanctions and the coronavirus pandemic. The government managed to realize ‘jump in production’ in the real sense of word,” he said.

Rouhani said: “The two-fold increase in the petrochemical production capacity over eight years and reaching 100-million-tonne production capacity is very important. Every year, $3 billion was invested only in the petrochemical sector despite all hardships, a sign that the Petroleum Ministry, the private sector, companies and all of our engineers and workers have done a great job.”

“Nowadays in the country, there is consensus that Iran needs development and that production needs to be boosted. Everyone agrees that we have to keep the economy running. The main discourse in our country is growth and development, and we are united on the issue of growth and development,” said the president.

Defeating Sanctions

Rouhani said Petroleum Ministry had been driving development in the country under his administrations. “Today we are self-sufficient in gasoline, gasoil and gas production; while we used to import these products and that is a big source of honor for the country,” he said.

The president said Iran would have faced economic problems without its petrochemical industry.

“Nonoil exports constitute 34% of our exports. In other words, petrochemicals replaced oil because many obstacles were created on the way of our oil exports. However, over the past eight years, our nonoil exports grew $130 billion compared to the previous eight years,” added Rouhani.

The president said his administration would be defeating sanctions, adding: “Every Thursday, we inaugurate big projects, which is very important under condition of sanctions and the coronavirus. Today’s inaugurations amounted to IRR 290,000 billion. That is why the opposite parties came to the negotiating table in Vienna. They have agreed to remove the main sanctions on the oil, petrochemical, banking and insurance sectors among others and talks are under way for details.”

Sanctions Halved Investment

Minister Zangeneh said more than $3 billion had been invested in the petrochemical sector by the private sector every year. “Were it not for the sanctions and if we could use foreign finance and investment, the figure would double,” he said.

“Using foreign finance and investment does not mean that we disregard domestic issues. Rather, it means that we would use foreign sources alongside domestic sources,” he added.

Zangeneh said: “A campaign has started in the petroleum industry, which we hope would continue. It requires investment to rely on domestic potentialities. In other words, a chain of employment has been created in the manufacturing of equipment, services and startup. Hundreds of plants and workers have become active.”

Petchem Capacity Up 38%

Minister Zangeneh said with the inauguration of the three new projects, the government had made good on its promises.

“Under the 11th and 12th administrations, 22 petrochemical projects with capacity of 34 million tonnes came online, bringing the petrochemical production capacity from 56 million tonnes to more than 90 million tonnes. Over the past one year, the petrochemical capacity has grown 38%, which is the most historic for the petrochemical industry,” he said.

Zangeneh put at $17 billion the value of petrochemical projects that had come online. “Over the past eight years, more than $25 billion has been invested in the petrochemical industry. Some of these projects have been inaugurated and some others would come online under the second jump next year,” he said.

Referring to the Masjed Soleyman petrochemical project, the minister said: “I feel delighted that in Masjed Soleyman a project is inaugurated with an annual production capacity of 1.76 million tonnes of urea and ammonia with an investment of $850 million.”

The minister said agreement had been granted for building a petro-refinery in Masjed Soleyman, running on associated petroleum gas. “We hope that this project would also become operational so that more investment would be made in this area which is the birthplace of Iran’s petroleum industry,” he added.

Referring to the methanol project in the Sabalan petrochemical plant, he said: “Sepehr Energy and Petrofarhang have already invested $406 million in this project whose capacity is 1.65 million tonnes a year. The petrochemical plant may export 410 million tonnes of products a year.”

Zangeneh said: “With the commissioning of this project, the country’s methanol production capacity would reach 14 million tonnes a year. Based on plans, 5 million tonnes would be used in the propylene production chain and downstream projects in order to supply domestic needs and balance foreign markets for methanol.”

He also said that $48 million had been invested in the pentane and hexane projects of the Assaluyeh Exir Hallal petrochemical plant for an annual production capacity of 50,000 tonnes.

Petchem Output to Hit 100mt

Zangeneh said 10 projects would remain to become operational next year, adding: “With the inauguration of these projects, the country’s petrochemical production capacity would reach the target of 100 million tonnes a year.”

“Forty petrochemical projects are also ready for the third jump, whose operation would bring the petrochemical production to 133 million tonnes a year for $37 billion. These projects on average have had 30% progress,” he said.

Zangeneh said necessary arrangements would be made for megaprojects running on mixed feedstock soon. “The Hormuz megaproject with a capacity of 5.8 million tonnes and Arya oil & gas with a capacity of 4.8 million tonnes are among them, which are expected to supply new products. Classified under the third jump, they are planned to come online by 2027.”  

The minister said that a group of projects on associated gas gathering, development of gas fields, gas refinery, petrochemical plants and downstream projects would start in western Iran with a total investment of $2.5 billion. 

He said projects had been defined for the 7th Five-Year Economic Development Plan in order to pave the way for development in the petrochemical industry.

“Within this framework, emphasis has been laid on the strategy of development and completion of the value chain and diversity in products and creation of value-added in the propylene, methanol, ethylene and benzene chains,” he added.

The minister said once all these projects become operational, 20 new products would be added to the petrochemical mix.

“I feel so happy that our colleagues in the petrochemical industry have honored their commitments. The government was supposed to provide feedstock for this projects,” he said.

Several days prior to the inauguration of the new projects, Behzad Mohammadi, CEO of National Petrochemical Company (NPC), had said: “Iran’s installed petrochemical capacity reached 65 million tonnes from 1963 to 2019, which has now reached 90 million tonnes. A 25-million-tonne increase in one year and 38% growth indicate unprecedented record in this industry.”

Noting that NPC is the architect of petrochemical development, he said: “In addition to development plans, I would like to mention that the petrochemical industry is today involved in hard currency generation.”

Mohammadi said Iran’s petrochemical production capacity would reach 130 million tonnes a year by 2025, adding that the country would see a diversified petrochemical mix by that time and therefore strategic downstream products would experience a decline in imports.

He said diversity in the petrochemical mix would also change the image of the petrochemical industry. He said that six new chains of 33 projects were envisaged to become operational in coming years.

MIS Petchem Exports to Start

Akbar Eftekhari, CEO of State Pension Fund, said the Masjed Soleyman (MIS) petrochemical plant in the north of Khuzestan Province had created 4,000 jobs during construction and 1,500 jobs during operation. He said following the first oil discovery in Iran in this rea, no other project had become operational there.

He touched on the production of 1.076 million tonnes of urea in the MIS petrochemical plant, saying: “An agreement for exporting 500,000 tonnes of products by this company has been finalized, and exports will begin soon.”

He said total investment made in the MIS project stood at $850 million, adding that the project was expected to earn Iran $268 million annually.

Eftekhari said the MIS project was the product of trilateral cooperation among China’s Wuhan Co. as the contractor, the private sector as partner, State Pension and Iranian engineers during the coronavirus pandemic.

Construction of the MIS urea/ammonia plant started in March 2015 for an annual production of 680,000 tonnes of ammonia and 1.075 million tonnes of urea by consuming 861 mcm a year of gas as feedstock. State Pension Fund holds a 66.55% stake in the project with the rest going to the private sector. China has provided the $850 million investment line for this project.

The ammonia unit of this plant has received Swiss Casale license, while the urea unit holds the Japanese Toyo license.

Petrofarhang, Top Methanol Supplier

Mohsen Haji-Mirzaei, the minister of education, said at the ceremony to inaugurate the Sabalan petrochemical plant that Petrofarhang Co. was one of the four holdings of Teachers' Investment Fund (TIF).

“This holding is active in the petrochemical and energy sector, and its profits go to TIF,” he said.

“In fact, a significant share of this fund’s profit, which would reach IRR 50,000 billion this year, is the result of futurist investments in the petrochemical sector. Within the framework of such strategy, we have been witnessing Petrofarhang’s second methanol project inauguration by the president in one year,” he added.

Haji-Mirzaei added: “The Sabalan petrochemical plant, owned 51% by Petrofarhang, is the second methanol project to come online in one year, and the first of a group of three projects run by Sepehr Energy, whose products would worth $400 million a year.”

He said Petrofarhang would inaugurate two other methanol projects in coming years under the names of Dena and Siraf Energy.

“Through such planning, Petrofarhang would turn into one of the largest producers and suppliers of methanol in the world. It would be a source of national pride and a source of revenue for teachers. In addition to profitability, it would also contribute to national development,” he added.

Marzieh Shahdaei, CEO of Petrofarhang, also said methanol was not the final point for Petrofarhang. “This holding will get involved in the downstream industry this year,” she said.

She said that China Export & Credit Insurance Corporation (Sinosure) had provided the necessary finance for the Sabalan petrochemical project in 2015, adding that Petrofarhang joined Sepehr Energy to accelerate the project.

“Once operational, this plant would add 1.65 million tonnes to national output,” he said.

Shahdaei said Sabalan petrochemical plant had been fitted with a Danish technology, noting that most equipment had been domestically manufactured. She added that a catalyst developed by the Petrochemical Research and Technology Company (PRTC) had been used for the first time in this plant.

Sabalan petrochemical plant has come online with an investment of $412 million for the production of AA-grade methanol. It lies in the Pars Special Economic Energy Zone. Its shareholders are Sepehr Energy (99.96%), Dena Petchem Co., Siraf Energy Investment Company, Seco Trading and Sepehr Lavan Petchem Company. The necessary feedstock for this plant, equal to 1 million tonnes of natural gas, would be supplied from the national gas trunkline by the Damavand Petchem Company.

Iran Ends Hexane, Pentane Imports

Mohammad-Reza Akhavan, CEO of Takht-e Jamshid Petchem Company, said Exir Hallal Assaluyeh Petrochemical was a subsidiary of his company, noting that it was launched to produce 40,000 tonnes of hexane and 10,000 tonnes of pentane.

He said Exir Hallal Assaluyeh Petrochemical had been launched to compensate for shortages of polyethylene and polystyrene solvents.

“Exir Hallal Assaluyeh Petrochemical is an accelerator. We used to import hexane and pentane from South Korea and India among others. But now we no longer need to import them and we even plan to export,” he said.

Akhavan put at $48 million the total investment made in the Exir Hallal Assaluyeh Petrochemical project, saying it had been financed fully by the private sector.

“This project is forecast to earn the country at least $30 million in foreign sales and $10 million in domestic sales,” he added.

With the inauguration of this project, he said, petrochemical plants across Iran would no longer have to worry about supplying hexane, which is very versatile.

“This product is delivered to petrochemical plants by pipeline. This company has designed 6 kilometers of feedstock supply pipeline so that Exir Hallal Assaluyeh Petrochemical would be ready to receive 260,000 tonnes of raffinate from Nouri Petrochemical Plant,” said Akhavan.

Noting that the technical knowhow, design and catalyst had been provided by Exir Novin Farayand Asia, he said that more than 90% of equipment used in the project had been sourced domestically.   

Courtesy of Iran Petroleum