Events | Number 5, June 2004 |6th Iran Petrochemical Forum - Iran’s Greatest Hope: the petrochemical industry

6th Iran Petrochemical Forum
Iran’s Greatest Hope: the petrochemical industry

The 6^th Iran Petrochemical Forum was held in Tehran on 1^st and 2^nd of May 2004 with the participation of 1600 experts representing 340 companies from 46 countries. The Forum was inaugurated with recitation of verses from the Holy Koran.

Then Mr Mohammad Reza Nematzadeh, Deputy Oil Minister and President of NPC, and Mr Mohammad Hassan
Peyvandi, the Forum Chairman, opened the Forum by welcoming the participants. The first official speaker was the Oil Minister, Mr Bijan Namdar Zanganeh, who pointed out that the National Petrochemical Company must
support downstream industries and transfer part of its units to the private sector in order to expand its petrochemical production and attract domestic and foreign capitals.

The Minister noted that the Oil Ministry supported petrochemical industries, adding, “Iran has prioritized development of its domestic gas industry to supply global markets while giving priority to supplying feed to
petrochemical industries and fuel for domestic consumption.”

He said that the widespread domestic market, existence of specialized manpower, construction of infrastructural facilities, appropriate supportive laws as well as economic and political stability were the major
factors attracting investments to Iran’s petrochemical industries.

The Oil Minister pointed out that the Oil Ministry was duty-bound to follow up regional cooperation in joint investments and stabilizing markets by observing all parties’ interests. “During the Fourth Economic Development Plan about 11 billion dollars will be attracted to the industry as joint ventures and Iran’s petrochemical exports will hit 7 billion dollars by the end of the Plan,” he noted.

Mr Zanganeh added that the capacity of domestic petrochemical industries was expected to reach 70 million
tons of petrochemicals worth 20 billion dollars by the end of the Fifth Economic Development Plan.

Mr Zanganeh’s speech was followed by a speech given by Mr Nematzadeh the Deputy Oil Minister and the President of National Petrochemical Company.

Mr Mohammad Reza Nematzadeh, announced that the firm determination of Middle East states, especially
the Islamic Republic of Iran, to develop infrastructures as well as produce and supply natural gas, had doubled incentives for investment in the petrochemical industry.

Mr Nematzadeh added that Iran, in particular, had been transformed into a lucrative center for attracting investment in the petrochemical industry.

Mr Nematzadeh said that NPC is attempting to build ties of long-term cooperation with wellcredited international companies for joint venture projects both within and without Iran.

He expressed hope that the NPC, in cooperation with domestic and foreign companies, would be able to produce major petrochemical products, including 12 million tons of ethylene, 10 million tons of various kinds of polymers, five million tons of ethylene glycol, 7.5 million tons of methanol, eight million tons of urea and four million tons of various kinds of aromatics. All of these products will meet international standards, he pointed out.

Mr Nematzadeh added that Iran is predicted to earn more than 20 billion US dollars from its sales of petrochemical products during the Fourth Five-Year Plan (2005-10).

He said that NPC had begun cooperation with a number of companies possessing state-ofthe- art technology. Also, referring to the improving economic conditions in Asia, North America and, to some extent, Europe, beginning with the second half of 2004, Mr Nematzadeh said that the petrochemical industry would gain even greater advantages and it is expected that demand and prices for the petrochemical products will continue to rise by 2007.

In the afternoon of the same day Mr Mohammad Mallaki, the Managing Director of National Iranian Gas Company was the first speaker and delivered a speech titled “A View to Iranian Gas Industry and Its Impact on the Petrochemical Industry”. He said that “demands for natural gas are growing and we expect that it will triple during the coming 25 years”.

Mr Mallaki added that the Islamic Republic of Iran has the advantage of having the second largest gas reserves in the world. He pointed out that during recent years, important steps had been taken to set up the
essential infrastructures to meet local demands for gas.

He added that the unique geographical location of Iran, its huge natural gas resources, the construction of adequate infrastructures like gas refineries, pipelines for transfer of CNG, sound planning to attract important investment to the national industrial infrastructure during the years to come, should pave the way to the crucial role that Iran has to play in the natural gas trade.

In the same afternoon, Mr Mohammad Hassan Peyvandi, NPC’s Director of Planning and Development and the Forum Chairman, delivered a full account of NPC’s past plans and achievements and its future objectives.

He pointed out that during Iran’s First Socio-Economic Development Plan, eight petrochemical complexes had
been constructed and brought on-stream using feedstock from Iran’s refineries. Also, the diversity of production had expanded through an emphasis laid on increasing higher valueadded products.

Mr Peyvandi further added that within the past forty years NPC’s operations had increased 100 folds and much of that was achieved within the past decade. The expansion of NPC is still continuing full steam, he added.

What is currently being planned is to make NPC a truly world class petrochemical company within the next ten
years. This strategy is mainly based on Iran’s colossal natural gas resources, as well as its geographic location and its valuable human resources.

Iran’s favorable foreign investment regulations are also helping the attainment of NPC’s strategic objectives with respect to foreign investment, he said. Mr Peyvandi went on to give a presentation aimed at delineating NPC’s achievements as well as providing a summary of the company’s plans, programs and projects currently
approved. The presentation was especially designed to give prospective investors an up-todate overview of the existing opportunities.

According to Mr Peyvandi during Iran’s First Development Plan nine new projects had been completed or reconstructed and had come into operation, namely the Arak, Bandar Imam, Khorassan, Tabriz, Esfahan
and Orumieh Petrochemical Complexes and the DAP and 2^nd Methanol Projects.

The main objectives of the First Development Plan, Mr Peyvandi added, were the substitution of a part of imports of petrochemical materials such as polyethylene and VAM and the expansion of downstream capacities.

In the Second Development Plan, added Mr Peyvandi, further diversification of production was achieved and various commercial offices were established abroad to develop a global marketing network.

Also the 6^th Olefin, 1^st PTA/PET, 2^nd PTA/PET, 3^rd Aromatics, Engineering Polymers, 1^st Lab and the 3^rd Methanol Projects were completed and put into operation.

The Third Development Plan concentrated on natural gas, ethane and condensate as feedstocks, and implementing world-scale olefin, polyolefin and methanol projects based on NPC’s core business. The Third
Plan projects comprised: the 7^th Olefin, Pars Petrochemical Complex, Arya Sasol Polymers (9^th Olefin), 10^th Olefin, 4^th Aromatics, 4^th Methanol, 4^th Urea Ammonia, Isocyanates, Acetic Acid, VAM and the 5^th Urea
Ammonia Projects.

The Fourth Development Plan to be implemented in 2005-10, is based on NPC’s presence in the global market, and investing over 11b USD, following the strategy of maximum use of gas-based feedstock specially from South Pars Gas Field.

The projects envisaged for implementation during the 4^th Plan comprise: The 8^th Olefin, Kharg Olefin, 5^th Methanol, Polystyrene, 1^st GTL, 11^th Olefin, 12^th Olefin, HDPE (J.V.), 6^th Urea & Ammonia, PBT (private
sector), Acetic Acid & VAM, 6^th Methanol, LDPE (Amir Kabir), 3^rd PTA, 2^nd Ammonia, 2^nd Ethylene Hexanol, DME, 13^th Olefin and the Acrylonitrile & MMA, some of which are planned to be implemented by the private
sector.

Comments from EVENTS During the two days the forum was held about 20 papers were delivered on the various aspects of the petrochemical industry.

In this current issue two of the papers given at the Forum by outstanding scholars are included. In future issues more of these papers will be published for the information of those of our readers who are interested
in the petrochemical industry.

In our opinion the event was very well organized and to the satisfaction of all the participants. The theater was
very well suited to the purpose and very comfortable and convenient. The sound of the speakers was well and clearly heard and the speakers were scholars that knew their work and what they talked about.

Parallel to the Conference that went on in the main theatre there was an exhibition outside it in the same building where many companies involved in the related fields exhibited their works through posters and brochures and provided information to the people that were interested. The Exhibition was very informative and
many of the participants spent considerable time moving from one stand to another with great interest.