7 April 2025 - 15:09
  • News ID: 656361
NPC: 18 petchem projects nearing operation

SHANA (Tehran) – The CEO of the National Petrochemical Company (NPC) stated that the year 1404 (2025-2026) will be the peak year of the Seventh Development Plan (2024-28), with around 18 projects worth a total of $5 billion set to become operational.

These projects will add approximately 9 million tons to the country’s production capacity, with some products being manufactured domestically for the first time, according to Hassan Abbaszadeh.

The year 1403 (2024-2025) was a challenging yet successful year for Iran’s petrochemical industry. Despite limitations such as gas imbalances, severe winter cold, and feedstock shortages, petrochemical plants largely met production targets and played a significant role in generating foreign currency for the country.

Now, at the beginning of 1404, the petrochemical industry is approaching the Seventh Development Plan with renewed motivation and a future-oriented vision. Key priorities include expanding the value chain, increasing exports, completing unfinished projects, and diversifying product offerings.

 In an interview with SHANA, the deputy oil minister for petrochemical affairs discussed the industry’s achievements, challenges, and plans for the past and upcoming years, which follows:

The petrochemical industry is the country’s top forex earner. What role did it play in the economy in 1403?

The petrochemical industry plays a crucial role in completing the value chain and generating foreign currency. About 70% of petrochemical products are exported, bringing in $13.5 billion in 1403, of which $11.5 billion was delivered to the Central Bank. Another $2 billion was spent on imports of catalysts, chemicals, and equipment. Despite gas shortages due to extreme winter conditions, the industry’s foreign currency earnings did not decline compared to 1402.

Did the petrochemical industry face major challenges in 1403?

Yes, it was a particularly difficult year. From Aban (October-November), the industry faced gas imbalances because power plants needed fuel reserves for winter. Additionally, the cold season was longer and harsher than usual, further straining gas supplies.

Where did the petchem industry stand at the beginning and end of 1403?

In 1403, 75 million tons of petrochemical products were produced against a total capacity of 97 million tons, leaving a 22% gap due to feedstock shortages, gas imbalances, and maintenance issues. Exports reached $13.5 billion, while domestic sales amounted to $10 billion.

Were all planned projects for 1403 completed?

The target was 80 million tons, but 75 million tons were achieved—close to the goal. Some projects, like Apadana Persian Gulf and Sadaf Assaluyeh, faced delays due to gas feedstock shortages and financing issues but are now set for operation in early 1404.

 

What is the current status of projects that were planned for inauguration in 1403? 

Several projects were initially set for inauguration in 1402 but faced delays: 

- Persian Gulf Apadana Project: Ready for launch, but since it relies on gas feedstock, its inauguration was postponed until after the cold season. It has already produced a batch and is now set to open in early 1404. 

- Sadaf Assaluyeh Project: Faced financial shortages, but the issue was resolved by the Persian Gulf Holding. It is now expected to become operational by Khordad 1404 (May-June 2025). 

- Ilam Polypropylene Project: Planned for 1403 but is in the pre-commissioning phase and will be launched in the first quarter of 1404. 

These projects had some operational tasks remaining in 1403 and will now be inaugurated in early 1404. 

The petrochemical industry has emphasized "value chain completion" and "sustainable development." What actions were taken in 1403, particularly under the 14th administration? 

Efforts to complete the value chain intensified under the 14th administration: 

- Domestic production of petrochemical goods: About $2 billion worth of petrochemical goods are imported, and domestic production is being prioritized. 

- Polypropylene chain development: The Maroun Petrochemical Company designed a polypropylene park, securing necessary permits and funding from the Central Bank. A strong value chain for seven new products is being developed in Mahshahr. 

- Regional development strategy: A land-use plan is being prepared to identify petrochemical potential in each province based on water resources, feedstock, and existing industries. The framework is finalized, and contractor selection will begin in early 1404. 

- Upstream field development: Petrochemical companies are engaging in upstream projects to ensure stable feedstock supply. Regulatory hurdles are being addressed following the Supreme Leader’s emphasis on reducing bureaucracy. 

Diversifying export markets is crucial. What steps has the National Petrochemical Company taken to expand international cooperation? 

International engagement is key for market expansion, technology transfer, and financing: 

- New export markets: A plan with the Foreign Ministry targets Africa, India, and South America. Progress is expected in 1404. 

- Catalyst self-sufficiency: Iran now produces most catalysts domestically and exports them to Russia and neighboring countries, generating foreign currency. 

- Equipment localization: While most fixed equipment is produced locally, some rotating equipment is still imported. Efforts are underway to minimize reliance on foreign currency for critical items. 

- Foreign financing negotiations: Discussions are ongoing for pre-sales and foreign investment to fund projects. 

Is Iran still exporting catalysts? 

Yes, Iranian catalyst exports to Russia, northern countries, and others began 1.5 years ago. Most catalyst technology is developed by the Petrochemical Research & Technology Company and commercialized by knowledge-based firms. 

The 7th Development Plan began in 1403. What progress has been made in petrochemical projects under this plan?

The 7th Development Plan focuses on value chain completion (propylene, methanol, ethylene, ammonia, aromatics) rather than just capacity expansion. Key points: 

- 50 active projects requiring $24 billion in investment ($12 billion already secured). 

- Average physical progress: 45%. 

- Projects not advancing may be revised or canceled by Shahrivar 1404 (August-September 2025). 

What support does the 7th Development Plan provide for the petrochemical industry?

- Feedstock discounts: Downstream investors benefit from discounted upstream feedstock, with settlement certificates allowing cost recovery from the government. 

- Profit reinvestment: At least 40% of holding/company profits must be invested in value chain development. 

- Privatization (Phase 2): Pension funds must exit petrochemical holdings, transferring shares to the real private sector (currently, only 15% of the industry is privately owned). 

What is the biggest challenge for the 7th Development Plan?

Feedstock shortages: 

- 20% of petrochemical plants face feedstock deficits. 

- Solutions: 

  - Flare gas recovery: 4 million cubic meters/day added in 1403; more planned for 1404. 

  - NGL 3100 Project: Operational by mid-1404. 

  - Petrochemical participation in upstream projects (longer-term solution). 

  - Gas optimization in households/commercial sectors (freeing up gas for industry). 

 How will the industry fund the 8% annual growth target set by the Leader? 

- $12 billion needed for remaining 7th Plan projects. 

- Funding sources: 

  - Foreign financing (prioritized projects). 

  - Shareholder equity (reinvestment of profits). 

  - Public-private investment fund (under development). 

What is the National Petrochemical Company’s focus for 1404? 

- Inaugurating 18 projects worth $5 billion, adding 9 million tons of capacity. 

- Boosting exports (target: $15 billion) and domestic sales ($12 billion). 

- Securing feedstock (minimizing gas shortages in winter). 

- Market expansion (new products like isopropyl alcohol for disinfectants). 

 Where would Iran’s petrochemical industry be without sanctions?

- Faster project completion (pre-sanctions: projects finished in 36-40 months vs. now up to 10 years). 

- Lower costs (logistics, insurance, technology). 

- Higher capacity: Current ~100 million tons could have been 140 million tons. 

- Increased revenue: Current $12 billion exports could have reached $14-15 billion. 

Sanctions have hindered technology access, financing, and market competition, but the industry continues to adapt. 

Despite challenges, Iran’s petrochemical industry is advancing through value chain development, feedstock optimization, and international market diversification. The 7th Development Plan is a critical phase, with major projects set for inauguration in 1404, reinforcing Iran’s position as a key global petrochemical player.

News ID 656361

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