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Alignment for Sustainable Petchem Feedstock Supply with Appropriate Pricing

Alignment for Sustainable Petchem Feedstock Supply with Appropriate Pricing
(Saturday, June 22, 2024) 11:46

TEHRAN (NIPNA) - The Deputy Petroleum Minister and CEO of the National Petrochemical Company (NPC) emphasized the strategic priority of the petrochemical industry to fulfill domestic needs before considering exports.

Addressing the Elite and Expert Symposium on the Challenges of Feedstock Pricing in the Petrochemical Industry, Morteza Shahmirzaei called for upstream sectors to prioritize domestic feedstock supply before export to ensure sustainable operations at appropriate pricing.

He highlighted the importance of utilizing all available capacities to achieve a leap in production.

The official reported that the implementation of approximately 130 petrochemical projects, valued at around $100 billion, has commenced, with about 70 of these projects progressing satisfactorily. However, continuous efforts are required to overcome development obstacles and accelerate project execution.

In his remarks, Shahmirzaei noted the readiness of key hubs in Asaluyeh, Mahshahr, the Parsian Energy Region, Lamerd, Dayyer, Kangan, and Siraf to attract new investments. Investors will benefit from special legal supports and incentives as part of the government’s strategic plans.

He paid tribute to the martyrs of the state, including Martyr Ebrahim Raeisi, underscoring the petrochemical industry's resolve to bolster the foundations of the Islamic Republic of Iran, in alignment with the principles of the Islamic Revolution.

Discussing feedstock pricing challenges, Shahmirzaei pointed to rising domestic consumption, lack of strategic focus, absence of comprehensive governance for feedstock allocation and distribution from the Supreme Energy Council and the Ministry of Petroleum, and energy imbalances as critical issues.

He called for alignment and cooperation to secure sustainable feedstock supplies at reasonable prices.

Shahmirzaei proposed revising pricing by incorporating the average gas prices of neighboring countries' industries and suggested forming a specialized committee to periodically update feedstock pricing formulas based on current conditions.

He also stressed the importance of energy management and optimal resource use to alleviate existing imbalances, ensuring more feedstock availability for the industry, with significant collaboration from petrochemical holdings.

Highlighting the need to move away from crude sales towards producing final products with higher added value, Shahmirzaei noted that this shift aligns with the Supreme Leader's emphasis on reducing crude sales. He urged the industry to focus on value chain completion as a strategic priority.

The NPC CEO underscored the goal of a new structural transformation in the petrochemical sector, leveraging existing experiences for comprehensive governance and regulation.

He advocated for the adoption of renewable energy sources and innovative technologies to transform energy supply in the petrochemical industry, promoting balanced development.

Shahmirzaei mentioned ongoing efforts to capture flare gas with all stakeholders' cooperation, enhancing feedstock supply for petrochemical plants. He indicated that associated gases in the East and West Karun regions are being collected, and NGLs 3200 and 3100, along with the Bid Boland Gas Refinery in the Persian Gulf, will improve feedstock provision.

He announced that all existing flares will be extinguished soon, with those in the petrochemical industry set to be out by the end of 2026, marking a significant step towards environmental protection and production increase.

Shahmirzaei concluded by emphasizing the strategic priority of meeting domestic demand before exports, expecting upstream sectors to align with this approach.

He also praised the industry's efforts to localize and domesticate its needs using advanced technologies, highlighting the National Petrochemical Research and Technology Company’s achievements in technical knowledge sales and catalyst production.

Last year’s credit supply of 800 trillion rials worth of petrochemical products significantly transformed downstream industries, easing their procurement processes. Shahmirzaei noted that the establishment of over ten specialized chemical parks by petrochemical holdings is underway to facilitate value chain completion and ensure balanced industry development.

The symposium on the challenges of feedstock pricing in the petrochemical industry was organized by Imam Sadiq University and held on Thursday, June 20.

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