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EghtesadOnline: Petrochemical, fertilizer and refinery projects with annual capacity to manufacture 5 million tons are facing rough times and some have been put on hold as the water problems worsen.

According to Energy Newcomes, a domestic privately-owned media group, water scarcity is one of serious challenges Tehran faces as it seeks to skirt US economic sanctions by boosting output of petroleum byproducts that are more difficult to track than crude that has identifiable characteristics.

Referring to plans to build a petrochemical plant near  Firouzabad Country in (parched) Fars Province, Hamidreza Soleymannejad, one of the plant’s project managers was quoted by the media as saying that it has everything needed to start work (authorization from the Oil Ministry and National Petrochemical Company as well as funds), but has barely registered 10% progress after 10 years.

The manager put the blame on the limited water resources crucial for cooling the plant’s boilers, Financial Tribune reported.

“In the initial studies there were some errors about the water the plant would actually need,” he said, adding that the (water-stressed) region simply does not have the water needed for the plant.

According to Reza Banimahd, a businessman with experience in refinery projects, the fate of the Firouzabad plant is not unique as many similar projects were proposed by lawmakers trying to create jobs in their constituencies. 

“Unfortunately the technical studies have been ignored,” he said.

Despite the fact that Iran has massive hydrocarbon reserves and is willing to raise output of downstream products that can help evade the unilateral US sanctions, development of water-intensive industries are menaced by drought and rapidly depleting water resources.

The plant in Firouzabad, an inland area in the thirsty south, is planned to produce 1 million tons of ethylene a year. 

Based on figures for a plant with the same capacity,  output would need at least 2 million tons of water a year.

The government is struggling with the worsening water crisis and wants to transfer the $500 million plant to coastal regions where desalinated water could be used. But the local inhabitants have objected and the project has stalled.

“There is a problem with coordination between ministries over development plans,” Kaveh Madani, a former deputy vice president for the environment said, adding that sanctions have forced the government to sacrifice development projects and the environment in the interest of job creation.

Deferral of the Firouzabad plant has had ripple effects, disrupting other projects that are supposed to use the facility’s ethylene -- a raw material used to manufacture polymers namely polyethylene (PE), polyethylene terephthalate (PET), polyvinyl chloride (PVC) and polystyrene (PS) as well as fibers and other organic chemicals. 

If (and when) the plants become operational, they will add to the strain on the region’s inadequate water reserves.

Iran’s petrochemical plants have the capacity to produce  65 million tons of goods a year, of which 22.5 million tons is normally exported. 

The government aims to increase output to 91 million tons in two years and 130 million tons in five years. Iran’s refining capacity stands at about 2.23 million barrels per day.

Iran is an arid and water-scarce country. The amount of annual renewable water resources is 1,600 cubic meters -- nearly one fifth of the global average of 7,600 cubic meters.

Caption: Iran’s petrochem plants export 22.5 million tons of goods annually.


Projects Iran refinery Petrochemical Water development projects Water Problems Water Paucity fertilizer