Price Reduction of Petrochemicals Feed: the Government’s Approach to Investment and Employment

Price Reduction of Petrochemicals Feed: the Government’s Approach to Investment and Employment
Holding the Second Debate Meeting with the Oil Ministry and the Representatives of the Private Section (Association of employers) in Majlis Industries Commission

According to Jam petrochemical complex public relation cited from “ Electronic Trading Portal for Chemical and Petrochemical Products and Industries” considering the progressive trend of the oil ministry and private section representatives debates, which demonstrate the eleventh Iranian government’s determination to encourage and motivate Iranian investors in petrochemical industry, the second debate meeting with the aim of having more specific discussions in regard to the generalities and approach of the plan to be rendered to the government board is going to be held. Of note, the first meeting was held with the presence of the oil minister and his assistant in petrochemical affairs, and twelve representatives and teams of experts in Majlis Industries Commission. 

Regarding this, a specific report has been prepared by a team of experts from National Petrochemical Company (NPC) and Association of Petrochemical Industry Employers in order to convince the government board and oil ministry. The noticeable point is that apparently this time, the government and NPC’s determination to expedite petrochemical industry development is quite serious.

Having transferred a number of plans and petrochemical complexes to the private section, National Petrochemical Company has made its role weak in financial support and direct management of this industry in order for it to develop. Therefore, considering the position loss of Iran petrochemical industry in the world ranking, the new team of petrochemical industry, the members of which are the veterans in the improvement and construction period, is determined to raise and improve the position of Iran petrochemical industry in the world.

The responsible team for following up the issue is trying to convince the 11th government and Majlis, by making reference to the similar world activities carried out by the governments in the Middle East, Asia, U.S.A, and Europe in regard to the price of Ethane, Methane, and liquid feed of petrochemical complexes, that the government’s decision to give a discount on the price of the feeds will eventually ends up in the government’s great achievements in entrepreneurship and employment, which are among the significant considerations and worries of the 11th government.

 Equalizing the prices of Ethane, natural gas and naphtha cuts which are the main feeds of the fundamental petrochemical units with those in the Middle East and Africa is the major consideration in the decision of oil ministry and industry commission. This issue will provide a bright outlook for the profit increase of the current petrochemical complexes especially those that use liquid feed; it will have a noticeable effect on TEPIX for stock exchange petrochemical companies; it will double the foreign and Iranian investors’ incentives to invest in petrochemical industry; it will increase the entrepreneurship and employment rates in industrial regions; and last but not least, it will increase the total value of the country exports by inhibiting raw materials selling which in return provides foreign currency income in order to develop investment in the country and reinforce national currency.

Considering fast development of petrochemical industry and its influence on other important industries namely construction, road and urban development industry; transport and shipping, home furniture, car manufacturing and clothing industries it is predicated that if the government prices liquid feeds 20% below the average price in Persian Gulf region and Africa, more than 50000000000 USD, within the next ten years, will be invested in oil refining industries and petrochemicals with liquid feeds which will in return produces approximately 1000 job vacancies.

Considering fast development of companies that use natural gas to produce Methanol, Ammonia, and Urea fertilizer, the government’s quick and serious planning and making decisions is a strategic priority. Persian Gulf states are increasingly investing in chemical fertilizer manufacturing plants while Iran, benefiting from the lower price of the utilities, can be and maintain its being the price and market leader in producing chemical fertilizers. The determiner is the speed of investment in complex foundations and product supply in the world market in order to make the most of the opportunities. Hence, appropriate price of natural gas in comparison with its price in the region (about seven cents for each normal cubic meter of gas) is a good contributor to the development of this industry. In this field, at least 30000000000USD is needed to be invested within the next ten years.

Considering China as a competitive country in producing Olefin from coal-based Methanol and its becoming independent in olefin import, Ethane price adjustment with that in the Middle East region can act as a stimulant to complete the Olefin plans in South Pars and Chabahar regions and polymeric plans for East and Centre Ethylene lines. Moreover, if South Pars Phases start working fast in order to produce the required Ethane, another stimulant to invest in Iran petrochemical industry will be provided.

Persian Gulf states, particularly Qatar and Saudi Arabia, and European governments have provided an appropriate field for broad investment and employment by maintaining the feed prices low and decreasing the tax on imported gas feeds and gas shale, respectively.

Understanding current situation in the world and severe competition between countries in investment attraction in different energy sections, the 11th government is trying to pave the way for Iran petrochemical industry development. Such determination will bring a bright future for Iran petrochemical industry.

Nov 2, 2013 09:30
Jam Petrochemical Complex public relations |
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