One of the key strategies of the petrochemical sector in recent years
has been the development and completion of the base product value chain, with a
primary goal of reducing raw material exports. While various policies and
approaches have been pursued to achieve this goal, the overarching strategy
remains centered on the development of value-added products. NPC's CEO
emphasized that the focus of development plans for the 7th Five-Year
Development Plan is on enhancing and expanding the value chain for core
petrochemical products, where Iran already adds significant value.
Currently, Iran’s petrochemical industry has reached an annual
production capacity of nearly 96 million tons. According to forecasts, this
capacity is expected to grow by an average of 8% annually, reaching 132 million
tons by the end of the 7th Development Plan. Along with diversifying feedstocks
for petrochemical complexes—including raw gas, methanol, urea, ammonia, and
ethane—the plan also includes a diversified product portfolio.
Strategic Shift Toward Value Chain Completion
As part of its broader development goals, NPC is pursuing 61
petrochemical projects worth $24 billion in the 7th Development Plan, with
approximately half of the required investment already secured. These projects
are about 60% physically complete. Additionally, 48 new petrochemical projects
with a total investment of $40 billion are outlined for the 8th Development
Plan. Ensuring sustainable feedstock supply and efficient utilization of these
facilities remains a top priority.
In a strategic shift, NPC has reassessed and replaced approximately 17
raw material export projects with initiatives aimed at completing the value
chain. This move is designed to maximize the potential of existing
petrochemical complexes. The NPC’s management has also identified specific
opportunities to boost value-added production, such as in the propylene sector.
With substantial potential for propylene production from propane and butane,
NPC aims to build PDH/PP (propane dehydrogenation to polypropylene) plants.
This will not only help complete the propylene value chain but also address
challenges related to sanctions on transportation of raw materials.
Unlocking Methanol's Value-Added Potential
Iran’s methanol production capacity is substantial, currently reaching
10 million tons annually. However, much of this production is exported in its
raw form. As part of the shift towards value-added products, the government has
emphasized transforming methanol into feedstock for other petrochemical
complexes and downstream industries. One notable project is the Parsian
Methanol Park, which aims to complete the methanol value chain.
In line with this, NPC forecasts that Iran’s methanol production
capacity will increase to nearly 40 million tons annually within the next
decade. The plan is to convert at least 14 to 15 million tons of this
production into value-added products in lower segments of the value chain.
Additionally, there are ongoing discussions about using methanol to produce
gasoline through the MTG (Methanol-to-Gasoline) process, with companies such as
Petrofarhang and Shastan already allocating resources to this initiative.
Urea and Ammonia: Enhancing Domestic Markets
Urea and ammonia are other key products in which Iran’s petrochemical
industry has significant added value. Urea produced by Iran's petrochemical
companies is primarily used in the domestic agricultural sector, making product
quality a top priority. Companies like the Shiraz, Kermanshah, and Karun
petrochemical complexes have focused on improving urea production quality.
Moreover, the Pars Petrochemical Complex is now moving towards completing the
urea value chain by producing higher-value products such as melamine and
urea-formaldehyde resin.
As part of its efforts to ensure a stable feedstock supply, NPC has
implemented a discount system for feedstock provision to encourage investment
in value-added production. This approach is seen as a long-term strategy to
help complete the value chain of petrochemical products in Iran.
In conclusion, Iran's petrochemical industry is on track to diversify
and develop its product offerings, aiming to reduce raw material exports and
maximize value-added production. With a comprehensive strategy that aligns
industry players, government bodies, and investors, the industry is well-positioned
for sustainable growth.