Iran takes major role in petrochem market

Iran's petrochemical industry has taken a bigger slice of the Middle East market. At 21% of the Middle East market, Iran has already stopped shipping its petrochemical products to Europe in the past few years as it eyes the regional market of  Middle East, as well as the lucrative Asian market where demand has consistently expanded. Iran currently exports its petrochemical products to more than 60 countries, with bulk of these exports heading to the Far East, Central Asia, Southeast Asia and Africa.

Iran has significantly expanded the range and volume of its petrochemical products over the past few years. Its National Petrochemical Company (NIPC) is now the second largest producer and exporter of petrochemicals in the Middle East, after Saudi Arabia. Earlier announcement by NIPC's former Managing Director Abdolhossein Bayat reflects a more rosy outlook as Iranian petrochemical plants are expected to account for over 40% share of the Middle-East's petrochemical production by 2020.

The country has exported more than 7.8 million tonnes of petrochemical products valued at over $5.1 billion in the six months ending September 22. Iran plans to raise its petrochemical exports to $12 billion this year. New projects to raise capacities Iran is planning to launch 6 new petrochemical plants by mid-March 2015, according to NIPC director for production control Ali Mohammad Bosagh-Zadeh. The start of the new phase of the South Pars Gas Field is expected to help the operation of the upcoming petrochemical units. Currently petrochemical output and polymer production have reach 60 million tonnes yearly.

Iran is scheduled to commission the second phase of Kavian Petrochemical Complex and Karoun Petrochemical Complex's development plan in Iran's southern province of Bushehr, and petrochemical complexes in Lorestan,
Kurdestan, Takht-e Jamshid and Mahabad by March 2015, Mr. Bosagh-Zadeh added.

By mid-March, around 2 million tonnes of petrochemical products to its offerings. NIPC announced investment into strategic projects to boost petrochemical production. The company is allowed to have a 20% share in petrochemical investments which can rise to 49% in under-developed and undeveloped regions. NIPC prioritises projects with at least 60% progress for funding. Over 67 unfinished petrochemical projects are in need of investments to meet completion target.

A stronger cooperation with China in the petrochemical fields and research, education, trade, and industry is being sealed to benefit the petrochemical industry. China has agreed to pour into Iran's new petrochemical projects up to $4 to 4.5 billion. The new agreement where the Chinese will finance Iran's petrochemical projects covers 12 new projects. NPC has announced that petrochemical industry is slated to pour in over $10 billion for the financing of Sabalan, Bushehr, Masjed-e-Soleiman and Lordegan complexes.

There is no doubt that foreign investors are interested in Iran's petrochemical sector but want some stability to ensure their investments. Also, important factors are infrastructure, and government's direct and clear policy on foreign investments.