Iran develops new petrochem hub

Iran is on its way to developing its third major petrochemical hub in the Persian Gulf island of Lavan. This came after the National Iranian Offshore Oil Company (NIOOC) signed a $6 billion deal with a domestic corporation, Sepehr Energy, to develop the Lavan gas field and build a petrochemical complex in the island within the next 54 months. The Lavan field has 9.5 trillion cu.ft. of in-place natural gas, 6.2 trillion cu.m. of extractable gas reserves, and 62 million barrels of condensate. It is projected to yield 750 million cu.ft. of natural gas and 11,000 bpd of condensate.

The country intends to invest about $20 billion in Lavan gas field to turn it into a major petrochemical hub, according to Iranian Offshore Oil Co. (IOOC) Managing Director Mahmoud Zirakchianzadeh. The amount will cover the development of three phases as well as the construction of a petrochemical complex. Plans are also being considered to bring the gas output of the surrounding fields, including Reshadat, Belal, Resalat and even Khayyam gas fields, to Lavan to turn it into petrochemical products prior to exportation.

The offshore Lavan natural gas field was discovered in 2003 and has reserves estimated at around 9.5 trillion cu.ft. In his announcement, Iranian Oil Minister Rostam Ghasemi said Lavan Island, located in the southern part of Iran, will become the country's third major petrochemical hub once operational. He added that the development of this vast gas field with huge potential will present another breakthrough in the country's petrochemical sector.

Strong export performance Iran's petrochemical products exports rose to over $10.8 billion in the first 9 months of calendar year 2011. This was a substantial increase from the $6.2 billion recorded in the same period the previous year. This strong performance has been attributed to more than $46 billion poured into this industry to raise capacity in the last 46 years. Another $50 billion will be invested during the fifth five-year development plan (2015-2020) to further raise capacity to 5.2 million barrels per day (bpd).

The petrochemical industry accounts for 2% of the gross domestic production, 44% of the non-oil exports and 55% of the industrial exports. The country remains an important producer being located in a region where most of the world's energy is stored. The large quantities of ethane recoverable from natural gas support ethylene production at lower cost.

To date, about 70% of the equipment used in the petrochemical sector is produced by domestic manufacturers. During the 3rd Conference on Rotating Equipments at Oil Industry and Power Plants held in Tehran, Managing-Director of the National Petrochemical Company (NPC) Mr. Abdolhosain Bayat said the NPIC established Supplying Petrochemical Industries Parts, Equipments And Chemical Engineering Company (SPEC) to promote domestic manufacturing. This has supported the objective of self-sufficiency in manufacturing and repairing rotating equipment and providing catalysts for the petrochemical industry. Further improvement on the quality of domestically made equipment would require higher investments. He further noted that with the $50 billion investment in the petrochemical sector over the fifth five year development plan, NPC is involved in the implementation of majority of projects.