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EghtesadOnline: Methanol production capacity almost doubled in the past two years to 12 million tons in 2020 following the start of new petrochemical facilities in Assaluyeh in the southern province of Bushehr, managing director of Iran’s National Petrochemical Company said.

“NPC capacity can grow more than 24 million tons by 2028 if petrochemical plants get sufficient natural gas as feedstock,” ILNA quoted Behzad Mohammadi as saying.

Of the total annual production close to 700,000 tons is sold to the domestic market and the balance is exported.

NPC data show that in 2020 Iran accounted for 13% of the world's total methanol trade (85 million tons) and its exports were seen in international markets mainly in Iraq, China, the UAE, India and South Korea.

“Methanol export revenue in 2020 surpassed $2 billion,” Mohammadi said. One ton of methanol is sold for $200.

According to customs data, Iran exported 2.25 million tons of methanol to China between January-August 2020 -- up 26% from the same period in 2019 and 34% from 2018 when the US announced new sanctions on Iran.

Meanwhile, India significant reduced Iranian imports since the US stopped granting sanctions waivers to Iran's main customers in May 2019.

Iran is one of China’s key trading partners accounting for 30% of total Chinese methanol import in the past three years and is likely to remain so. A potential softer approach towards Tehran by the Biden White House is likely to impact India the most, allowing it to ramp up supply from Iran.




The methanol industry is waiting and watching for changes in US foreign policy under US President Joe Biden as well as global decarbonization policies that could create new opportunities for this type of fuel.

“Petrochemical plants in Assaluyeh receive 20 billion cubic meters of gas per year a part of which is used to produce 12 million tons of methanol.” Iran’s annual gas production is in the neighborhood of 320 billion cubic meters.

Because methanol value-added chains, including methanol-to-olefins and propane dehydrogenation, are not complete, NPC has to sell methanol for $200 per ton to China where it is converted to propylene and sold for $1,200 per ton. China, which has a large methanol-to-olefin capacity, is a natural target market for Iranian supplies.

Traditionally, methanol is used as feedstock to produce chemicals such as acetic acid and formaldehyde, which in turn are used in products like adhesives, foams, plywood subfloors, solvents and windshield washer fluid.

According to the NPC boss, there may be limits to growth from traditional applications of methanol in petrochemicals in the coming years.



Expanding Frontiers 

“A more promising outlet in the future could be the shipping sector, which is seeking alternative fuels to reduce it emission footprint.”  NPC as a global methanol supplier will probably have to look beyond traditional demand outlets to find a home for methanol supply, he said.

New opportunities are arising from a policy push for decarbonization, including in the marine transportation sector, where there is interest in alternative fuels.

The trend is driven by the International Maritime Organization's initial strategy on the reduction of greenhouse gas (GHG) emissions from ships, which seeks to reduce total GHG emissions by at least 50% from 2008 levels by 2050, and CO2 emissions per transport work by at least 40% by 2030.

Methanol is a safe-to-carry clean liquid, readily available at major bunkering hubs, and can significantly reduce GHG emissions.

Methanol, also known as methyl alcohol amongst other names, is a light, volatile, colorless, flammable liquid with a distinctive alcoholic odor similar ethanol. 

Availability of relatively cheap feedstock plus demand from Asia has contributed to robust growth in Iran's methanol industry in the past decade.


Bushehr methanol petrochemical facilities