According to the NPC, Hassan Abbaszadeh made the remarks Wednesday during a meeting with the head and members of the Production Club, the head of the economic working group of the Leader’s Office, and the deputy head of the National Development Fund’s executive board. Presenting a report on the current status and future plans for the petrochemical sector, he said Iran’s installed petrochemical capacity currently stands at about 100 million tons and is expected to reach 131 million tons under the Seventh Development Plan. 

Abbaszadeh stressed that achieving this goal hinges on completing the value chain, which has been identified as a top priority in both the Seventh Development Plan and the 14th administration’s programs. 

The deputy oil minister highlighted two major challenges in developing the industry: securing feedstock for petrochemical complexes and attracting investment for ongoing projects. 

 Plans to activate idle capacity underway 

Abbaszadeh noted that about 22% of Iran’s petrochemical capacity remains unused due to feedstock shortages, particularly natural gas and other required inputs. He said plans are in place to address these shortages and utilize idle capacity, which would partially resolve feedstock supply issues. 

One key initiative involves utilizing flare gas, with $1.1 billion in investments by the Persian Gulf Holding. As a result, 14 of over 50 flares in the project will be extinguished this year, with the collected ethane allocated to Gachsaran Petrochemical, Bid Boland Persian Gulf Refinery, and Bandar Imam Petrochemical. 

Other projects include the NGL 3200 and NGL 3100 projects in Dehloran, which are expected to return 10 million cubic meters of gas to the grid in their first year of operation. 

 12 gas consumption optimization plans in petrochemical industry 

Abbaszadeh pointed to 12 defined projects for optimizing gas consumption in the petrochemical sector, with companies ready to meet their gas needs through efficiency measures. 

He also mentioned progress in upstream development, including a contract signed by Bakhtar Group and Petro Farhang to develop two gas fields. These fields are expected to yield 25 million cubic meters of gas daily, supplying petrochemical projects within two years. 

 Investment challenges, the need for $5b annually 

Addressing investment challenges, Abbaszadeh said attracting capital is a major hurdle. While foreign investment in the petrochemical sector once reached $4 billion, it has now dropped to $3.5 billion, mostly from domestic sources. 

To meet development goals, the industry needs about $5 billion annually, rising to $7 billion under the Eighth Development Plan. He added that his team is working on strategies to secure necessary investments. 

 Technology not a major obstacle 

While technology is crucial, Abbaszadeh said it is not the Achilles’ heel of Iran’s petrochemical industry, as solutions exist to acquire needed know-how. 

 Downstream industries near feedstock sources 

He emphasized the importance of locating downstream industries near feedstock sources, noting that prepared sites are available in special economic zones, just 18 km from petrochemical complexes. A utility corridor is also planned to support these sites. 

 Petrochemical exports, value addition 

About 70% of petrochemical products are exported, including 28 million tons of urea annually. However, many products are sold raw, whereas they could be converted into higher-value goods domestically. 

 Special contracts for downstream development 

Abbaszadeh highlighted special contracts for downstream industries, allowing them to start operations without delays. Talks with the National Development Fund have focused on prioritizing high-impact industries. 

 Reducing imports, strengthening domestic production 

Iran currently imports $2 billion worth of petrochemical products, mostly base materials for downstream industries. For instance, $200 million is spent annually on propylene oxide imports, despite having domestic production plans. 

 Completing the value chain to mitigate risks 

Failure to fully develop value chains could leave the industry vulnerable to price fluctuations. Abbaszadeh called for support from the National Development Fund to strengthen domestic production. 

 Petrochemical industry vision for 2051 

A list of 60 projects is being prepared for the 2051 horizon, focusing on downstream development. Abbaszadeh stressed the need for sustainable feedstock, particularly from petro-refineries, to ensure long-term stability. 

He also criticized the allocation of natural gas to fuel instead of petrochemicals, urging reforms to ease pressure on the industry. 

Under the Seventh Development Plan, discounts of up to 30% on upstream feedstock have been introduced for specific value chains—a move expected to significantly boost development.