Hassan Abbaszadeh, speaking Wednesday during a visit to the sour gas sweetening project in Phase 1 and the monoethylene glycol and ethylene production units in Phase 2 of the Bushehr Petrochemical Complex, highlighted the serious challenge of imbalance between upstream and downstream units in Iran’s petrochemical sector. Ahmad Zera’atkar, the oil ministry’s deputy for planning, accompanied him on the visit.

"While the best theoretical development model is an integrated value chain from upstream to downstream, in practice, we see disparities that have led to uneven growth in parts of the chain," Abbaszadeh said.

He pointed to a specific case in Parsian, where upstream ethylene production units are operational, creating a surplus, while downstream units are not yet ready for operation. "Had we focused on developing downstream ethylene units alongside upstream expansion three years ago, we wouldn’t be facing these issues now," he added.

Abbaszadeh attributed this lack of coordination to decision-making and prioritization approaches, noting that significant volumes of ethane (around 3 million tons) and 1 million tons of refined products are available. However, delays in midstream and downstream units have disrupted the value chain.

 Need to revise petrochemical industry development model 

Abbaszadeh stressed that these challenges are not limited to one region, emphasizing that the current model requires fundamental revision. "To fully realize the value chain and prevent resource wastage, we need a holistic approach to integrated development—one that ensures balance and avoids short-term influences," he said.

He noted that about 20% of the industry’s capacity remains unused, and several operational measures are being pursued to utilize it. "This has been discussed in various meetings, and implementation has begun," he said.

One key initiative is signing contracts to utilize flare gas. "Though some companies have yet to start operations, negotiations are underway to activate these capacities and direct excess gas to downstream feed," he explained.

 NPC’s steps in value creation 

While some surplus gases lack rich components like ethane, they can still be sold as excess methane at reasonable prices, Abbaszadeh said. "With proper chain management and full economic benefit to the producer, selling methane at prices like 18 to 25 cents per cubic meter can be viable. Selling at around 20 cents would make the economic model valuable and should be precisely calculated by technical teams."

He added that NPC is pursuing this calculation model and has held productive talks with relevant companies.

Addressing feedstock risks for the Bushehr Petrochemical Complex, Abbaszadeh said, "We need to take calculated risks to secure ethane-rich feedstock, and a solution is being pursued."

He also stressed the need to adjust the economic chain, such as securing discounts on upstream gas prices to make projects viable. "Similar models have been implemented in some petrochemical plants, where discounts were applied for downstream ethylene. We must adopt the same approach for sour gas. This process will take about six months, and we should start negotiations with the Plan and Budget Organization’s relevant committees now."