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Iran Seeks Toehold in Petchem Market

(Sunday, December 10, 2017) 14:24

TEHRAN, (Shana) -- The third panel held on the second day of the third annual Congress of the Iran Petroleum and Energy Club (IPEC) in Tehran was on petrochemical industry.


The panel was presided over by Marzieh Shahdaei, who is CEO of Iran's National Petrochemical Company (NPC).

She highlighted the contribution of petrochemical sector to Iran's economy, saying: "The growing trend of petrochemical industry depends on improved and expanded international relations."

She said that petrochemical industry had a 35% share in Iran's non-oil exports and a 39% share in the country's industrial exports. She added that these percentages had significantly increased from the previous years.

Shahdaei described petrochemical industry as a highly competitive sector in the world, saying: "In order to preserve its standing in this industry in the world, Iran has to act competitively."

She said that, by the end of March 2017, 50 petrochemical plants with a production capacity of 62 million tonnes were operating. During the last calendar year to March, 21 million tonnes of petrochemicals, worth $10 billion, was exported.

Shahdaei said there were 56 petrochemical projects in Iran, whose startup would add 55 million tonnes to the current production capacity.

She said some petrochemical projects had been slow in progress due to insufficient technical knowhow and financial shortages. "We hope that some obstacles blocking the progress of these projects would be removed. According to plans, future projects would be based on using gas and hydrocarbon compounds."

She said that one of objectives pursued in the 6th Five-Year Economic Development Plan would be to produce propylene through converting natural gas to olefin and also converting propane to propylene.

Shahdaei said that the operation of 10 petrochemical projects in the last calendar year with an investment of $3 billion, the petrochemical production capacity increased 5 million tonnes.

In the current calendar year, she added, operation of five more projects with $3 billion investment would add 10 million tonnes to the petrochemical industry production capacity. She expressed hope that 1,700 new jobs would be created.

"In its approach the petrochemical industry has focused on using such advantages as access to feedstock, realizing the objectives of resilient economy and indigenizing modern technologies," said Shahdaei.

She said that petrochemical projects needed foreign financing or credit lines in foreign banks. "Serving as facilitator, the NPC has had meetings with European and Asian banks," she said.

"With the help of the Ministry of Petroleum, negotiations are under way to establish project funds at home and abroad to provide necessary financing for the petrochemical projects," said Shahdaei.

New Chapter in Foreign Ties

Reinhart Vogel, director of petrochemical projects at Germany's Linde, highlighted the high profitability of olefin units in Iran, saying upgrading these units would boost their output.

He said Iran had made good progress in petrochemical sector and stressed the need for the completion of incomplete projects.

Vogel said financing, supplying feedstock and building facilities were among the main indicators of petrochemical industry growth.

Linde opened talks with Tehran after the lifting of international sanctions in early 2016 and signed its first contract, worth $40 million, in August last year with a domestic company on providing licenses to manufacture a range of petrochemicals with higher value added.

"Having spent $288 million on 296 new patents filed in 2016, France's Air Liquide is keen to use its know-how to boost the efficiency of Iranian petrochemical units," Thomas Wurzel, the company's director for E&C, Downstream and Petrochemical, said.

"Renovation is an inevitable and constant element," Wurzel said as he elaborated on Air Liquide's plans to license technologies to convert methanol into petrochemicals that generate higher profit.

"Methanol is an important link in the petrochemical value chain … It can be used as an intermediate or final product," he noted, pointing to the beginning of a "new chapter" in Air Liquide's relations with Iran.

Air Liquide Engineering signed a memorandum of understanding with the Petrochemical Research and Technology Company of Iran in August on transferring state-of-the-art technology to convert methanol into propylene.

The Paris-based company is an engineering, construction and chemical process licensing company. Since 2007, it has been part of Air Liquide S. A., a multinational company that supplies industrial gases and services to industries.

Jose Miramontes, sales director at UOP Limited, also saw a unique window of opportunity in Iran for converting methanol into other petrochemicals.

"We are ready to collaborate on licensing two major petrochemical processes; methanol-to-olefins and propane dehydrogenation," Miramontes said.

He forecasted that global demand for propane, which is also known as propylene, will rise by 36% by 2025, indicating that it would be a smart move to invest in advanced propylene production technologies.

Propane dehydrogenation is a step in the production of propylene from propane. Propylene is the second most important starting product in the petrochemical industry after ethylene. It is the raw material for plastic polypropylene, a component that is mainly used in the automotive, textile and packaging industries.

UOP is a multinational supplier of technology to refining, gas processing, petrochemical and manufacturing industries.


Courtesy of Iran Petroleum