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Petrochemical Industry of Iran 2007
PRIME VISTAS RESEARCH AND CONSULTING, June 2007
In a matter of few years, Iran has elevated itself to 60th in the world and 2nd largest producer and exporter of petrochemicals in the Middle East. The country produces 12 percent of the total petrochemical production in the Middle East while contributes up to 1 percent to the global output of petrochemicals. In 2007, the production has touched 5 million tons per annum which is set to soar to 20 million tons by March 2008. Of the 5 million tons production between March 2006 and March 2007 (Iranian Calendar starts March 20), over a million tons worth over 800 million dollars have been exported. The most exported product has been liquid gas while the least exported product has been polyethylene. From the planned production of 20 million tons between March 2007 and March 2008, around 14 million tons are expected to be exported.
Given Iran's plans and current pace of development, it is looking at a huge 34% share of petrochemical production in the Middle East and 2.6 percent of global production by 2015. It is aiming at a production figure of 98 million tons per annum by 2015, out of which 75 percent is expected to be exported. By 2024, Iran is expecting to capture 36% of the total petrochemical production in the Middle East which will be 6% of the total world production of petrochemical.
Given its significant geographic location, low cost labor and highly skilled human capital, the country is rapidly attracting foreign investment in the petrochemical sector, which is significantly helping the government to achieve its production and export targets each year. Iran is expected to be the first country in the region by March 2015 that will produce ethylene, methanol, and BTX. During the period, domestic petrochemical complexes are predicted to produce at least 12 million tons of ethylene, 10 million tons of polymer, 10 million tons of urea, 14 million tons of methanol, and 4 million tons of BTX.
The National Petrochemical Company (NPC), Iran's state-owned petrochemical entity that supervises all petrochemical projects being implemented by a large of affiliate and subordinate companies who are in turn being assisted by leading international companies, is implementing a number of significant projects in different parts of the country to achieve the above stated target. The projects that the company is currently implementing are 11 projects at Bandar Imam Special Economic Petrochemical Zone (in Mahshahr), 16 projects at Pars Special Economic Energy Zone (in Assaluyeh), 21 projects in other areas and 2 projects outside the country.
However, Iran requires an investment of at least 12 billion dollars each year to achieve the goals it has set under the fourth and fifth five year plans. Provided this investment level is achieved in time, Iran will be able to earn about 25 billion dollars per year in foreign exchange from the exports of petrochemical products by 2014. Given the recent high foreign investment record, despite growing US and European opposition to its nuclear enrichment and threats of international sanctions, it seems that Iran will be able to attract the foreign investment it seeks in the petrochemical sector. Between March 2006 and March 2007, NPC attracted $ 2.5 billion worth of foreign investment, only second to foreign investment attracted by the oil industry. Some of the well known investing companies include Mitsubishi, Snamprogetti, Salzgitter, Haldor Topsoe, Daelim, Simon Carves, Lurgi, Chematur, Hansa Chemie, Uhde, Vinnolit, ABB Lummus, Nikan, Alstom, Mitsui, BF Goodrich, Toyo, LG, Toray, Polimeri Europa, Technip, Basell, Stamicarbon, Intesca Uhde, Kellogg, Chiyoda, BASF, Ammonia Casale, Linde, Norsk Hydro, Kawasaki, Tomen, Industrie Generali SA, Cheil, However, the present rate of investment is the minimum that the country should maintain in order to keep up with its plans. It seems that in case the political problems aggravate and the economic sanctions on the country are in fact imposed, it may not be able to maintain the rate of investment required to achieve the targeted production and export.
This report investigates in detail the petrochemical industry of Iran. It provides both the historical background and present-day developments in the sector, including project-by-project analysis of all petrochemical projects in the country including their production, important dates, investors and contributors.
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