EghtesadOnline: Export of 23 million tons of petrochemicals in the last fiscal (ended in March) helped offset at least 20% of lost oil revenues, a member of the board of directors of the National Petrochemical Company said.
“Close to 34 million tons of hydrocarbons was used as feedstock in 55 petrochemical plants that produced 31 million tons in 2019,” Abdolhossein Bayat was quoted as saying by ILNA.
Of the total output, 23 million tons were exported and earned $9 billion, (almost 20% of Iran’s oil revenues in fiscal 2018).
In that year (2018), a barrel of crude sold for about $50 and the National Iranian Oil Company’s daily exports was 2.5 million barrels generating $45 billion per year.
Due to the new US sanctions which took effect in September 2018, oil exports gradually fell to less than 250,000 barrels per day in 2019.
According to the official, a wide range of feedstock namely propane, ethane and naphtha is converted into value added goods like ethylene, propylene and methanol which are used to produce plastics, adhesives, resins and synthetic rubbers.
Referring to the international petrochemical market, he said prices have fallen by a massive 30% on average in the last seven months due to historic low crude prices (used as feedstock in petrochemical plants) and the massive destruction of economies caused by the Covid-19 outbreak.
“The best way to offset low petrochemical prices is to diversify output with value-added goods.”
A feedstock like ethane or propane should be converted into more than one commodity via completing the value chain and development of petrochemical downstream sector.
Regarding Iran’s comparative advantage in the huge petrochemical sector, such as abundant natural gas for feedstock and domestic production that has significantly progressed, the industry has tackled most of its problems over the last two years, he said.
Petrochemicals account for 35% of the country's non-oil exports.
Such products can grab a bigger share of the international markets if the role and authority of the state-owned National Petrochemical Company expands, he said without elaboration.
NPC is the chief regulator of the petrochemical sector. The state-owned company used to be a conglomerate of dozens of petrochemical firms that are now privatized as part of the push to downsize the bloated bureaucracy.
Bayat noted that to help raise annual feedstock supply by 14 million tons, seven projects costing $8.5 billion will come on stream before the fiscal year ends in March 2021.
Parsian Sepehr Refinery, with two plants in Fars and Bushehr provinces, and three natural gas liquid projects, namely Dehloran Gas Refinery in Ilam Province, Kharg NGL Plant in Kharg Island off the Persian Gulf and the NGL 3200 project in the southern Khuzestan Province are being completed.
NGL, or natural gas liquids, are components of natural gas that are separated from the gas in the form of liquids. Natural gas liquids are valuable as separate products.
Ethane, propane, butane, isobutane, and pentane are all NGLs used for a variety of purposes like inputs for petrochemical plants, burned for space heating and cooking, and blended into vehicle fuel.
Underlining the petrochem sector as a driver of economic growth, he added that the local petrochemical sector uses $400 million worth of catalysts a year most of which is produced locally.
Iranian companies use at least 23,000 tons of catalysts a year. Private companies produce 20,000 tons covering most of the demand.