Baku, Azerbaijan, Aug. 14
By Fatih Karimov – Trend:
Iran has increased feedstock gas price for petrochemical units to 2,790 rials(each USD makes 31,064 rials) per cubic meters for fourth calendar month of Tir(June 20-July 20), the oil ministry’s SHANA news agency reported Aug. 14.
The price was set at 2,702 rials, 2,464 rials and 2,313 rials per each cubic meter for preceding months of current Iranian fiscal year (started March 20).
Feedstock price is a key factor when it comes to investment in petrochemical projects.
The tariffs are deduced from a pricing formula that was approved last year and will be in effect until 2025.
As per the new formula, the price of feedstock will be contingent upon prices at major global gas trading hubs, including the US Henry Hub, Alberta Hub in Canada and the UK NBP Hub.
The deduced prices will take a 10 percent cut in the first half of the year and will increase by 10 percent over the second half.
Iranian petrochemical plants use about 13 billion cubic meters of gas per year (bcm/y), while some 2.8 million tons/year of ethane is consumed in this sector.
The country’s actual production capacity is around 61 million tons per annum, but the shortage of natural gas as feedstock, old production units, and the problem of sanctions, which has dropped exports, have caused petrochemical complexes to work at lower capacities.
The Islamic Republic hopes to bring this capacity to 120 million tons by 2020 and 180 million tons by 2025.
Iran produced 46.4 million tons of petrochemical products during the last fiscal year, but for the current year, the figure is planned to reach 54.7 million tons.