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Petchem Investment in Upstream Sector, a Significant Step Forward

Petchem Investment in Upstream Sector, a Significant Step Forward
(Thursday, May 2, 2024) 15:39

TEHRAN (NIPNA) - Iranian Petroleum Minister, Javad Owji, hailed the commencement of petrochemical investments in the upstream sector as a crucial and significant endeavor.

Speaking at the signing ceremony of agreements to study the development projects of 16 gas fields with petrochemical holdings and exploration and production companies, Owji emphasized the potential benefits of petrochemical companies' investment in the upstream gas sector for the country.

"This marks the beginning of a very important and major initiative. The discussion of petrochemical companies and holdings investing in the development of the upstream gas sector can yield very positive results for the country," stated Owji.

He added, "In discussions and evaluations conducted, petrochemical companies have demonstrated their ability to effectively manage large oil and gas projects in the upstream sector with the assistance of E&P companies."

Owji highlighted the anticipated growth in Iran's oil and gas production, stating, "This year, we will see a surge in Iran's oil production, and we will also face an increase in gas production." He announced plans to add 6 million tons to the petrochemical production capacity and 50,000 barrels to the country's oil refining capacity.

"Both the Central Bank's statistics and those of the Iranian Statistical Center indicate very good economic growth in the oil and gas sector, with growth rates exceeding 25% in some quarters," Owji noted.

He emphasized the significant contribution of the oil and gas sector to the country's overall economic growth, stating, "The government's economic growth is close to 6%, half of which is attributed to the economic growth of the oil and gas sector."

The Petroleum Minister also announced recent agreements signed with methanol-producing petrochemical companies to produce gasoline, aiming to address the gasoline deficit. He stated that this initiative is expected to yield results within the next one to one and a half years.

"Currently, petrochemical companies are entering the field of gasoline production, as well as investing in the upstream sector, gas gathering, and value chain development, which can lead to a transformation in the country's petrochemical industry and economic prosperity," Owji explained.

Regarding plans to gather flare gases in the West Karoon region, Owji stated, "With the operation of projects such as NGL3200, NGL3100, and the Bidboland Persian Gulf project, the CEO of Persian Gulf Holding has promised that gas gathering in the East Karoon will be realized in the coming months, and another part of Mahshahr Petrochemicals' needs will be met with NGL3100."

He continued, "This year, 79 semi-finished projects worth $16 billion will be operationalized, with the goal of increasing production. Additionally, 50 new projects worth $25 billion will commence this year."

Regarding petrochemical feedstock supply, Owji said, "Last year, 8% more gas, equivalent to 5 million cubic meters per day, was allocated to petrochemical units compared to the previous year, which led to an increase in petrochemical production and reaching a production level of 75 million tons in 1402."

He added, "I promise that this year, both in terms of volume and value of production, there will be a greater production in the country's petrochemical industry."

Owji issued a warning to industries and power plants with low gas consumption efficiency, stating, "I warn against unconventional and inefficient uses of gas in industries and power plants. If they do not focus on increasing productivity and efficiency this year, they will face penalties, and their fuel allocations will be reviewed because we cannot restrict petrochemical gas during cold seasons while industries and power plants consume gas inefficiently and with low efficiency."

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