Iran Petchem Industry Pursues $24b Investment for 61 Projects

Iran Petchem Industry Pursues $24b Investment for 61 Projects
(Wednesday, January 15, 2025) 13:04

TEHRAN (NIPNA) – Iran's Deputy Petroleum Minister and CEO of the National Petrochemical Company (NPC), Hassan Abbaszadeh, announced the implementation of 61 petrochemical projects requiring $24 billion in investment under the Seventh Development Plan.

Speaking at a meeting with Deputy President Mohammadreza Aref, Abbaszadeh revealed that $12 billion has already been spent, with an average progress rate of 50%, and another $12 billion in funding is forthcoming.

With 70 production plants and three utility facilities, the petrochemical sector is a significant pillar of Iran's economy. “Currently, 85% of the petrochemical industry is concentrated within holding companies, primarily affiliated with national pension funds, while 15% belongs to the private sector,” Abbaszadeh said.

Focus on Value Chains

The Seventh Development Plan shifts focus from merely increasing production capacity to enhancing value chains. Abbaszadeh noted that previous strategies prioritized production growth, but the new plan targets reaching a capacity of 131.5 million tons by 2028 in key areas like methanol, polyethylene, and ethylene. “Though this approach adds complexity, it is crucial for achieving higher value-added production,” he stated.

The NPC is prioritizing projects and monitoring progress to align with the dual goals of increasing capacity and completing value chains. Financial challenges remain a significant hurdle, but Abbaszadeh emphasized efforts to secure funding, including collaborations for collecting associated gas and investing in small gas fields to stabilize feedstock supplies.

Energy Optimization and Renewable Initiatives

Addressing feedstock shortages, Abbaszadeh highlighted initiatives to optimize energy consumption. The industry has partnered with local communities in colder regions, promoting energy-efficient equipment and culture to redirect domestic gas savings to petrochemical feedstock.

Furthermore, many petrochemical companies have entered renewable energy ventures. For instance, Kaveh Methanol has signed contracts to develop 800 MW of solar power and 500 MW of wind power to meet its electricity needs.

Regional Development and Export Growth

The NPC is also advancing a nationwide zoning plan to attract investment tailored to each province’s resources, water availability, and existing industries. This strategy aims to bolster downstream petrochemical activities and stimulate local economies.

On the export front, Abbaszadeh reported $10 billion in petrochemical exports over the past nine months, projecting this figure to reach $13 billion by year-end. Domestic downstream industries have also been supported with $10 billion worth of feedstock for products like polymers, footwear, textiles, and detergents. Efforts are underway to expand the customer base beyond traditional markets with the help of petrochemical holding companies.

By prioritizing high-value projects and exploring renewable energy opportunities, Iran’s petrochemical sector is poised to sustain its pivotal role in the economy despite financial and operational challenges.

Email is required
Characters left: 500
Comment is required