Dalga Khatinoglu, Trend Iran News Service head
The Mehr News Agency reported on Tuesday that Iran's petrochemical production capacity reached 60 million tons in the past Iranian calendar year, which ended on March 20.
Iranian petrochemical industries are grappled with many problems, such as the EU and the U.S. sanctions, as well as the non-participation of foreign companies in related projects. National Iranian Petrochemical Company's managing director Abdolhossein Bayat said in March 2010 that some 15-16 percent of parts and equipment, used in Iranian petrochemical industries, are being manufactured domestically.
But, Iranian officials have recently announced that over 50 percent of the parts and equipment are manufactured domestically and the country has reached self-sufficiency in some cases.
Despite internal and external sanctions, some 15 million tons of petrochemical and polymer products worth $11 billion, were exported to over 60 countries last year, Mehr said.
Bayat has referred to a government approval, which banned exports of some petrochemical products, as the internal sanction.
According to the Iranian ministry of industries and mines, Iran exported petrochemicals worth $11.5 billion during the year which ended in March 2011. In other words, the value of Iran's petrochemical exports has not increased so much recently, while production capacity has risen.
Iran says some petrochemical units are used to produce gasoline because the shortage of fuel after the U.S. sanctions over exporting gasoline to the country enacted in 2010. Deputy Oil Minister Abdolhossein Bayat told IRNA in February 2012 that it is expected that about five billion litres of gasoline would be produced by petrochemical complexes during this solar year (Iran's last solar year). This amount is 13.6 million litres per day, equal to 22.5 present of the country's total gasoline production.
Mehr also reported that Iran inaugurated 10 production and development units last year in the petrochemical sector. The units added 7 million tons to the country's petrochemical production capacity, so that the capacity is currently around 60 million tons in this sector. The figure was around 44 million tons during the Iranian solar year which ended in March 2010 and 51 million tons in late 2011.
Iran enjoys huge natural gas reserves. On March 29, the U.S. Energy Administration Agency put Iran's natural gas reserves at 33.6 trillion cubic meters. However, Iran will face hurdles for developing its upstream oil sector (exploration, drilling, production) due to international sanctions which hinders foreign companies from investing in Iran's petrochemical projects.
According to the official statistics, Iran sells natural gas to domestic petrochemical industries at a cheap price of 700,000 rials (about $20) per one thousand cubic meters, while the country receives $500 for exporting the same amount of natural gas to Turkey.
Iran produces some 360,000 barrels of gas condensates per day, which is partially used by petrochemical industries. Gas condensates are ultra light premium oil which are derived from gas wells and are best substance for producing polymer products. Natural gas is also used widely in petrochemical industries.
Anyway, Iran's 11-billion-dollar petrochemical export is a heavyweight in the country's total exports. According to the U.S. Energy Administration Agency, Iran's crude oil and gas condensates exports totaled $69 billion in 2012. The country has announced that its non-oil exports hit $41.5 billion in the past calendar year. Exports of gas condensates and petrochemicals were reportedly about $12 billion and $11 billion, respectively.
Iran sold some 10 billion cubic meters of natural gas, worth around $4 billion, to Turkey and Armenia last year. Iran also exported LPG (butane and propane) worth over $3 billion in the year which ended in March 2012, but sanctions declined the exports in the past solar year.
Exports of oil, gas, and petrochemicals account for a lion's share of Iran's total exports. So, the development of petrochemical industries can lead to billions of dollars of added value for Iran's energy sector.
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