TEHRAN: Iran’s revenues from the export of petrochemical products fell by around $660 million in the 10 months to January 19 compared with the corresponding figure of previous year, reflecting the slump in oil prices that prevailed in much of last year. Data provided by Iran’s Association of Petrochemical Industry Corporation showed that although the volume of petrochemical exports increased by 1 million tons in this period, exports value declined due to low oil prices in 2016, Mehr News Agency reported. Iran exported 17 million tons of petrochemicals and polymers, worth $7.3 billion, in the 10 months, down from $8.05 billion. The lion’s share of outbound petrochemical consignments went to Asia, Europe and South America. The 50-60% drop in regional and global petrochemical goods prices was the reason behind the fall in petrochemical revenues. This is while oil prices dipped below $38 a barrel last March. Petrochemical exports are forecast to reach 9-9.5 million tons by March 2017 when the current fiscal ends.
Iran’s petrochemical production in the current fiscal (ends March 20) has exceeded 42 million tons, according to latest reports. The volume is expected to top 50 million tons by March 2017. Tehran needs $72 billion in foreign investment for 80 major petrochemical projects in line with plans to triple petrochemical output over a decade. Petrochemical production capacity is around 65 million tons a year. Tehran hopes to boost the capacity to 130 million tons per annum by 2020 before reaching its lofty goal of 180 million tons annually by 2025. According to Marzieh Shahdaei, the head of Iran’s National Petrochemical Company, Iran holds 38% of the petrochemical market in the Middle East, but only produces 4.8% of the world’s petrochemicals despite sitting on some of the world’s largest crude oil and natural gas reserves. According to Mohammad Ali Rejali, vice president of APIC, talks are underway with European firms, including an unnamed German company, to increase polypropylene production in Rejal Petrochemical Complex in Bandar Mahshahr, Khuzestan Province. “Some European firms have submitted development proposals to provide Iran technology to boost polypropylene production capacity, although no contracts have been signed yet,” he said.
Commenting on constraints to expand production capacity of the key commodity, Rejali said, “Not only are we deprived of the necessary knowhow, but Rejal complex is also not provided with propylene as feedstock to produce polypropylene.” Rejali said the complex produces 160,000 tons of polypropylene per annum, adding that plans are in place to increase the capacity to 220,000 tons per year as soon as the obstacles are removed. According to Rejali, Salman Farsi Petrochemical Complex is being constructed in Mahshahr Petrochemical Special Economic Zone in the south to meet the complex’s demand for feedstock. The plant will produce 450,000 tons of propylene per year once it becomes operational.