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PetroEnergy Information Network

Wednesday / 1/31/2018 12:00:00 AM / 17:01
Service : Petrochemical - General
News Id : 281173
Reporter : 763

Propylene, Key to Iran Petchem Chain Development

(Wednesday, January 31, 2018) 17:01

TEHRAN (Shana) -- One of the most important elements of dynamic economy in Iran is development of petrochemical industry. Since there is suitable infrastructure in Iran, this industry could grow into one of the most profitable industries in the country.


One of the most important elements of dynamic economy in Iran is development of petrochemical industry. Since there is suitable infrastructure in Iran, this industry could grow into one of the most profitable industries in the country. In a bid to realize the objectives envisaged for the development of this industry, in addition to new investment and completing incomplete projects, selling raw materials must stop while the basket of petrochemical exports must be diversified.

Plans are also needed for new upstream projects and enhancing petrochemical production output. Meantime, downstream petrochemical sector is the best and most suitable alternative to crude oil exports and upstream petrochemical products. That must be taken into consideration more than before because of its revenue generation.

Iranian petrochemical industry officials have paid due attention to downstream petrochemical sector in the past one decade because balanced development in upstream and downstream sectors of petrochemical industry would bring a halt to raw material sales and generate high value-added.

Regardless of existing challenges, particularly during years of sanctions, Iran's petrochemical industry has been seeking a balanced development and completion of value chain. Now in the post-sanctions era, this industry needs national determination along with participation of all actors of this value-generating industry to experience the second cycle of its growth.

Already on the path of growth and development, Iran's petrochemical industry needs to complete its value chain. Therefore, along with the development of its upstream sector, its downstream sector must be also taken into consideration as a national strategy.

In the wake of the removal of sanctions following the implementation of Iran's landmark nuclear deal with six world powers, the ground is prepared for the downstream sector to grow proportionate with the upstream sector. Cutting edge technologies and new foreign investment may be used for completing the value chain of petrochemical industry at a higher pace. Energy experts maintain that investment in downstream industry would be safe and profitable because of high value-added. However, weak points must be removed and new planning is required.

Many years ago, the National Petrochemical Company (NPC) and the Iran Small Industries and Industrial Parks Organization (ISIPO) decided to build petrochemical parks in a bid to prepare the ground for the growth and development of downstream petrochemical industry. It was recently decided that downstream industries be established in industrial parks and not be independent. Industrial parks are endowed with all advantages required for the presence of downstream petrochemical industries. Development of these parks, particularly in border provinces, could accelerate the development of national petrochemical industry.

Due to its suitable position in the region, Iran can export products of its downstream petrochemical industries to neighboring countries with a market of around 600 million. Border provinces are instrumental in the development of downstream petrochemical industries, and by expanding border markets and setting up special export zones, national security would be boosted while volume of downstream industrial products would increase. In the 6th Five-Year Economic Development Plan, extensive planning has been made for the development of downstream industries. The national development plan has been formulated with a view to sustainable and balanced development. Along with reducing the sales of raw materials, plans have been formulated for the development of downstream petrochemical industries.

Undoubtedly, not selling raw materials and instead completing the value chain of petrochemical industry would help the goals envisaged in the national development plan materialize.

Access to new markets and diversification of the basket of products are among achievements of development of downstream petrochemical industries and will significantly enhance the production capacity of this industry in coming years.

Identification of opportunities for investment is a major strategy pursued by the Downstream Industries Development Office, and by developing required infrastructure, the selling of raw materials will stop and a high value-added would be generated.

The main mission assigned to Iran's economy for the coming ten years is job creation, providing welfare for people and increasing the economic strength of the country. To that end, the petrochemical industry will be instrumental both in the upstream and downstream sectors.

Nonetheless, over the past decades, development of value chain in this industry has been slow. Over recent years, converting ethane produced in southern Iran has accelerated. Since 60-70 percent of ethylene produced in the world is converted to polyethylene and glycol, and the rest being converted to non-polyethylene polymers, there is sufficient polyethylene in Iran. Therefore, polyethylene-dependent industries in Iran have been developed while propylene-based chemical industries have yet to be developed. That is while this group of products constitutes raw materials in the value chain of downstream industries.

Products achieved from propylene and polypropylenes are more diverse than those produced from polyethylene and ethylene. Therefore, many Iranian and foreign experts believe that shortage of propylene is the cause of non-development of propylene-based downstream industries.

Propylene is the second widely consumed raw material for petrochemical industry in the world, just behind ethylene. More than 92 million tonnes a year of propylene hit the market.

Propylene is a key petrochemical product used as feedstock for polymer and mid-stream products. The main derivatives of propylene are polypropylene, acrylonitrile, propylene oxide, phenol, acrylic acid, isopropyl alcohol and oligomers. They are used in electronics, car manufacturing, building and packaging.

Olefins are the most valuable petrochemical product. Ethylene and propylene, having an extended value chain and used for diverse purposes, are the most valuable petrochemical products. In Iran, important measures have been taken for the production of these two materials. For a variety of reasons, ethylene has overtaken propylene in production and there is a daily growing demand for propylene. Under the present circumstances, downstream production units whose raw material is polypropylene have in certain periods faced the shortage of this product.

With an annual output of eight million tonnes a year of propylene, the Middle East region stands fourth after Northeast Asia (China, South Korea, Japan and Taiwan), the European Union and North America.

The Iran Value Chain Studies Center says the Middle East region, particularly Iran, are lagging behind in propylene production. This issue must be taken into serious consideration in future planning.

Iran's rated propylene production capacity currently stands at 1.115 million tonnes a year. This capacity is fully based on low-output methods. Ninety-five percent of propylene produced in the country is converted to polypropylene and only the remaining five percent goes to Shazand Petrochemical Plant to be transformed into 2-ethylhexanol. This is while other valuable products are not manufactured due to various reasons including shortage of propylene in Iran.

Given the diversity of gas and liquid resources and the location of spots where petrochemical industry can grow in Iran, precise studies are needed to be conducted on choosing the suitable process for propylene production in Iran.

Over the coming five years, Iran's methanol output is expected to increase 25 million tonnes. Kaveh, Marjan and Bushehr methanol projects are currently in their final stages. The completion of these three projects, which have had 97%, 80% and 60% progress respectively, would enhance the country's methanol production capacity by a total of 5.61 million tonnes over two years, which will exceed 10 million tonnes.

Iranian experts believe that completing the country's petrochemical value chain would have no other solution than developing the value chain of olefins and manufacturing such products as polyurethane, polyol, ethoxylate, ether glycol, and acrylate.


Iran's petrochemical industry is expected to become propylene-based ; therefore, no more licenses are issued for the establishment of methanol units unless a company decides to launch new grades in Iran, as has been the case with the French oil and gas major Total.

Iran plans to supply 25 million tonnes of methanol on the market over five years, while the market can absorb only up to 16 million tonnes.

Concerns are growing about the future of methanol market, but by converting methanol to propylene and then to polypropylene, high value-added could be generated.

Currently, Iran has enough capacity to covert natural gas to methanol. At the Petrochemical Research and Technology Company (PRTC), the demo for converting methanol to propylene in Mahshahr with an annual capacity of 120,000 tonnes has been executed successfully.

At the Arak unit of PRTC, a plan is on the agenda to convert propylene to polypropylene. PRTC experts and managers hope to launch the propylene unit of this center with a capacity of 130,000 tonnes next March. The project, which is currently in the pre-start up stage, will help complete Iran's petrochemical industry value chain.

PRTC has managed to produce propylene with a purity rate of 99.6% at Mahshahr research center. This type of propylene is the petrochemical product of the highest value and the widest use.


Courtesy of Iran Petroleum