29 October 2023 - 16:36
  • News ID: 632313
New products at Iran petchem mix

Iran has faced tough US sanctions since 2018 when the Trump administration scuppered the 2015 nuclear agreement signed between Iran and six world powers. However, official data show Iran’s petrochemical industry could not be sanctioned. Ever since the 13th administration took office two years ago, Iran has focused on expanding its ties with neighboring countries and has doubled its petrochemical exports. Hossein Ali-Morad, director of international affairs at National Petrochemical Company (NPC), tells “Iran Petroleum” that Iran’s petrochemical exports rose from 20 million tonnes in 2020 to 70 million tonnes in 2022. He said Iran had diversified its international mix of petrochemicals.

The following is the full text of “Iran Petroleum’s” interview with Ali-Morad:

What international policy has NPC pursued under the 13th administration?

The 13th administration’s policy consists of broadening strategic ties with regional (neighboring), as well as aligned nations at international forums. As far as international affairs are concerned, we have tried to move in line with government strategies in developing international relations. Given recent developments, including the war in Ukraine, Iran got closer to Eastern countries like Russia to further pursue its national interests and make maximum benefit from international circumstances. For instance, due to the disruption in the food security chain, including urea fertilizer supply, and increased natural gas prices, we were flooded with high demand for urea fertilizer from Europe, Africa, and Asia. Iran was already expanding its ties with China as the former administration had signed a 25-year pact with China, which is of strategic importance.

How has the 13th administration’s energy diplomacy influenced your international cooperation?

Before answering your question, I would like to note that the results of negotiations and initiatives in the international arena, particularly energy diplomacy, would take time to come to fruition. However, over the past two years, our neighbors got to know our national strategy and policy, which were accepted by them. Although after the US pulled out of the Joint Comprehensive Plan of Action (JCPOA), some nations warming up to Iran, neighboring and aligned nations are not afraid of sanctions. We also push ahead with our talks with them in the petrochemical sector. Official data confirms our success in this diplomacy. For instance, after a Petroleum Ministry delegation visited a regional country in 2022, our petrochemical exports rose from 20 million tonnes in 2020 to 70 million tonnes, or registering a 2.5-fold growth. Another case in point is signing an agreement with Russian firms, as a result of which Iranian-made catalysts, developed by Petrochemical Research and Technology Company (PRTC), were delivered to the Russians. The delivery of these catalysts has persuaded other countries in the region to use this product developed by Iranian know-how.

So international interactions in the petrochemical sector have been on par with the petroleum industry.

Absolutely. For instance, technical know-how in the oil and gas sector is limited, but the diversity of technical savvy in the petrochemical industry is diverse and abundant due to the complexity of processes and variety of products. Therefore, petrochemical industry researchers and manufacturers face a wider space for international interactions. We have tried to go along with the petroleum industry and even outperform it.  

What do you think of the dominant trend in Iran’s petrochemical market?

Iran’s petrochemical industry is unsanctionable and will continue its production and export growth. Thanks to efforts made by those involved in the petrochemical industry, petrochemical exports have increased in parallel with enhanced output. Never have we faced a situation to not export petrochemicals while production has been underway. Therefore, one of the key issues followed up on by NPC is to use untapped potential for increasing production to increase exports while launching new projects. One of our objectives in the international sector is to expand our mix in order to reduce risk and not fall into the trap of buyer monopoly. I would like to say that our international petrochemical mix has increased and we are happy with its homogenous expansion. Plenty of companies are willing to buy Iranian petrochemical products. Hopefully, the 13th administration is making efforts to use these capacities for developing the petrochemical industry and I hope that the private sector would go ahead in parallel with the 13th administration so that our international standing would be strengthened. Apart from that, we are exporting catalysts and we are looking for good commercial partners to export Iranian technical know-how.

What measures have been taken to increase the number of buyers of Iranian petrochemicals?

To that end, we’ve benefited from the assistance of the Office of the Deputy Foreign Minister for Economic Affairs. We have also made the best use of strategies which we have arranged with them to add to our buyers of petrochemical products. For instance, the petrochemical industry is focused on market development in neighboring and aligned nations because they need Iran’s petrochemical products and accept the risk of dealing with Iran. For instance, food security is not something to play with, politically. Therefore, they would have to buy urea fertilizer from Iran for their food security and agricultural stability. The number of buyers of Iranian petrochemicals has increased. On 24 May, we held a friendly talk with Iranian ambassadors and heads of diplomatic missions at the NPC office. It was announced in clear terms that Iran’s petrochemical industry is bracing for diversity and we are interested in expanding our mix. Not only the number of customers, but also the number of countries buying from Iran is on the rise.

Would the significant petrochemical growth in a country like Saudi Arabia not affect Iran’s markets?

Certainly, we see such actors as Saudi Arabia and Qatar as rivals, but in some cases we see them as our peers. NPC is seeking to establish ties with Saudi Arabia in order to have SABIC as our future partner.

What have you done to attract investors?

NPC has introduced opportunities to qualified domestic holdings for foreign investment. One case in point has been partnerships in developing the petrochemical industry of aligned nations. Currently, building petrochemical plants overseas or even restoring them is on our agenda. We’re also planning to supply feedstock to them.

What did you focus on during talks with Venezuelan delegates?

In the aftermath of the recent talks with the visiting Venezuelan delegation, the Ministry of Petroleum and NPC experts are assessing needs based on domestic capabilities in order to make necessary arrangements for cooperation. Venezuela’s three petrochemical plants have a total capacity of 12 million tonnes, but only 4 million tonnes of which are currently active. One plan is to revive these plants. An Iranian private contractor has already started work and needs government support. We hope that this company will receive the necessary support so as to reach results within six months. Negotiations have been held for a wide spectrum of services ranging from technical and engineering services to supplying qualified manpower or overhaul, pre-commissioning, and commissioning as they don’t have even qualified experts.

Do foreign companies eye Iran’s upstream or downstream petrochemical sector?

Normally, they focus on the upstream sector as no development has taken place in the country in the upstream sector, while Iran has already reached maturity in this sector and has developed technical know-how. However, Iran’s petrochemical sector is also seeking partnerships in the downstream sector in order to develop necessary technologies for the value chain, in which case we would complete the value chain in the country while helping aligned nations.

What are your plans for foreign partnership in acquiring technical know-how for the downstream sector?

Such cooperation may primarily take place by purchasing technical know-how, after which technological cooperation and technical savvy development would take place.

News ID 632313

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