$1.5 Billion Petrochemical Plant Opens in Pars Economic Energy Zone
EghtesadOnline: To expand the value-added chain in the petrochemical sector, the first phase of Bushehr Petrochemical Company in Pars Special Economic Energy Zone (PSEEZ), southeast of Bushehr Province, became operational on Monday.
Built in nine years, the plant will produce ethane, ethylene, methanol, sulfur and acetic acid among other petrochemicals, IRNA reported.
Stretching over 70 hectares and costing $1.5 billion, it will produce nearly four million tons per annum, including 1.65 million tons of methanol, 1 million tons of olefins, 550,000 tons of ethylene glycol, 300,000 tons of light and heavy polymers and 300,000 tons of acetic acid.
The plant will use nine million cubic meters of sour natural gas per day as feedstock, which will be piped from the giant South Pars Gas Field off the Persian Gulf (shared between Iran and Qatar). It is sole complex in Iran equipped with natural gas sweetening trains.
According to the National Petrochemical Company, policies to complete the petrochemical value-added chain have helped increase installed production capacity from 40 million tons in 2012 to 70 million tons this year.
However, because not all plants operate at full capacity all the time, due to routine overhaul, technical problems and feed shortages, actual annual output hovers around 60 million tons.
In related news, IRNA quoted Behzad Mohammadi, the NPC chief, as saying that with the launch of 13 petrochemical projects by next March, production capacity will reach 90 million tons per year.
Ten more projects are scheduled to be completed by March 2022, raising annual output capacity to 100 million tons.
“The petrochemical sector annually generates $15 billion (including local and international sales) and this will rise to $25 billion in less than two years.”
Moreover, there are 28 other projects underway in different cities, some of which have registered 30% progress. When these come into operation, total yearly petrochemical production will reach 133 million tons worth $37 billion.
Lost Oil Revenue
According to Mohammadi, export of 23 million tons of petrochemicals in the last fiscal (worth $12.5 billion) helped offset 20% of lost oil revenue.
Due to the new US sanctions which took effect in Sept 2018, Iran’s daily oil export is said to be less than 230,000 barrels. No official figures are available.
Regarding the international petrochemical market, he said prices on average have plunged 30% since January due to historic low crude oil (used as feedstock in petrochemical plants) prices and the unprecedented hammering of economies by Covid-19.
“The best way to offset low petrochemical prices is improving product diversity and boosting output of value-added goods.”
A feedstock like ethane or propane should be converted into more than one commodity by completing the value chain.
Regarding Iran’s comparative advantage in the highly competitive global petrochemical industry, such as abundant natural gas for feedstock and domestic production that has significantly progressed, Mohammadi said the sector had a good performance in the last two years.
Petrochemicals account for 35% of Iran’s non-oil exports.