In the face of sanctions and international pressures, Iran’s petrochemical industry has played a role far beyond that of a purely economic sector. It has become an effective tool for advancing economic goals, strengthening foreign relations, and diversifying export markets. Consequently, the sustainable and targeted development of this sector has become more important than ever.

Hossein Alimorad, Director of Planning and Development at NPC, believes that despite Iran’s significant natural advantages—such as vast hydrocarbon reserves and low feedstock costs—the industry faces challenges in production and investment. Unilateral and unjust international sanctions, restrictions on access to modern technologies, financing difficulties, and limited access to key export markets have eroded Iran’s competitive edge. Meanwhile, regional rivals have leveraged advanced technology, large-scale investments in research and development, access to global capital markets, free entry to international markets, and strategic partnerships with leading global petrochemical firms to secure and maintain top positions, and in some cases, regional leadership.

However, Alimorad maintains that the petrochemical industry still holds strong potential for a powerful return to regional and global competitiveness—if political and economic conditions improve. To realize this potential, several priorities must be pursued: completing the value chain, developing downstream industries, producing high value-added products, forging strategic partnerships with aligned countries, investing in modern technologies, improving efficiency, accelerating project implementation, optimizing production operations, and expanding transport and logistics infrastructure.

In this context, petrochemical diplomacy is seen not only as a means to diversify target markets and expand the customer base, but also as a pathway to overcoming sanctions, financial and trade restrictions, and enhancing Iran’s international standing. In the second part of his interview with SHANA, Alimorad discussed the NPC’s key domestic and global initiatives.

Strategic roadmap and foresight projects

Alimorad explained that less than a month has passed since the launch of NPC’s strategic planning project. This initiative seeks to answer three fundamental questions: Where are we now? Where do we want to go? How do we get there?

The project involves valuable interviews with petrochemical industry experts, including former NPC managing directors, conducted by a professor from Sharif University of Technology. The process is led by NPC’s internal working groups, under the guidance of a consultant, ensuring participation from senior and mid-level managers and all staff in aligning actions with the strategy.

Once NPC’s position and strategy are defined, the next major step will be formulating the national petrochemical industry’s strategy through 2051 (Iranian year 1430), in collaboration with holding companies and possibly an international consultant. Notably, no such strategic plan for NPC or the industry as a whole has been prepared in the past 15 years.

In parallel, a foresight study will soon begin with the cooperation of another experienced professor from Sharif University. This study will combine quantitative and qualitative analysis, using scenario planning, modeling, and technology assessments, while incorporating environmental, social, political, technological, and economic factors—such as macroeconomic indicators in major petrochemical-consuming countries. The last such study was conducted by the Academic Jihad Organization eight or nine years ago.

The foresight project aims to guide capacity expansion with a focus on value chain development, resource allocation (including feedstock and capital), and decision-making for long-term projects. Scenarios will consider both current restrictions and potential easing of international tensions—examining whether to continue producing base chemicals or shift toward advanced technologies such as IoT and robotics to accelerate value chain growth. The study will also address technological barriers to value chain development and explore partnerships with leading global firms like Total and BASF in the event of renewed international engagement.

Addressing gas feedstock imbalances

Regarding Iran’s energy imbalance, particularly natural gas shortages, NPC has reviewed gas-based projects with little progress since last winter. This has led to revoking or modifying some licenses in line with value chain goals, freeing up gas resources for future needs. However, Alimorad stressed that canceling licenses alone is not a comprehensive solution.

Other approaches include encouraging petrochemical holding companies to invest in gas field development, ensuring both national gas production growth and stable feedstock supply for their projects. For example, at this year’s Oil, Gas, and Petrochemical Exhibition, a consortium of Bakhtar Petrochemical (80%) and Petrofarhang Holding (20%) signed a contract with the National Iranian Oil Company (NIOC) to develop the Gordian and Pazanan gas fields, targeting production of 25–30 million cubic meters per day within 1–2 years.

NPC is also pursuing flare gas recovery projects, both for environmental benefits and to provide additional feedstock. One major initiative, led by Bidboland Gas Refinery in the Persian Gulf, involves a \$1.1 billion investment to capture East Karoun flare gases for NGL production.

Regional competition, strategic partnerships

In regional competition, Alimorad identified Saudi Arabia’s SABIC as the primary rival. While Iran has significant production capacity and product diversity, regional competitors face fewer production and investment barriers, allowing them to maintain a competitive edge.

He emphasized five strategic priorities to strengthen Iran’s position:

1. Completing the value chain and expanding downstream industries.

2. Forming strategic partnerships with countries like China and Russia to bypass sanctions and expand markets.

3. Investing in advanced technologies and improving efficiency, especially in energy use.

4. Accelerating project execution and optimizing operations.

5. Expanding transport and logistics infrastructure to reduce export costs and improve price competitiveness.

Market diversification, petrochemical diplomacy

Alimorad underscored the need for close cooperation between petrochemical companies and the national diplomatic apparatus to diversify export markets and customer portfolios. Petrochemical diplomacy—leveraging diplomatic channels to open new markets, consolidate existing ones, and address trade barriers—is central to this effort. This includes improving banking mechanisms, logistics, shipping capabilities, and transport infrastructure, as well as negotiating preferential tariffs to boost competitiveness.

Final remarks

According to Alimorad, developing a strategic roadmap and conducting foresight studies require cooperation across all stakeholders in the petrochemical industry—a goal that has gained traction under Iran’s 14th administration. With about 70% of petrochemical output since 2016 allocated to exports, the sector has become a major source of foreign currency for the economy. By mobilizing both industry resources and public investment, Iran aims to accelerate petrochemical development, expand the value chain, and enhance wealth creation.

Interview by:

Younes Sadeqi