National Iranian Petrochemical Company

The National Iranian Petrochemical Company (NIPC), a subsidiary to the Iranian Petroleum Ministry, is owned by the government of the Islamic Republic of Iran. It is responsible for the development and operation of the country's petrochemical sector. Founded in 1964, NIPC began its activities by operating a small fertilizer plant in Shiraz. Today, NIPC is the second largest producer and exporter of petrochemicals in the Middle East. Over these years, it has not only expanded the range and volume of its products, but it has also taken steps in areas such as R&D to achieve more self-sufficiency.

Two special economic zones on the northern coast of the Persian Gulf have been developed to be home to the NIPC’s new project. These two zones enjoy a good access to feedstock, infrastructural facilities, local and international markets and skilled manpower. Despite pressure being exerted on the Islamic Republic over its nuclear program, Tehran expects to see a surge in petrochemical exports from $5.5 billion in 2007 to a total of nearly $9 billion in 2008.^[1] The Fourth Five-Year Plan (2005–10) calls for a fourfold expansion of petrochemical output, to 56 million tons per year.^[2]

History

Iran petrochemical industry dates back to 1963. The first petrochemical complex to produce fertilizer kicked off then. In 1977 (considered as initial development in Iran petrochemical industry) Razi, Abadan, Kharg, Farabi, Bandar Imam, complementary phase of Shiraz and Iran-Carbon of Ahwaz petrochemical units were put into operation in that year.

Due to getting involved in imposed war, Iran oil industry development experienced the lowest growth rate from 1978 till 1989. In 1989 the country petrochemical products reached 2.4 million tons a year.

Since 1989 till 1999 petrochemical industry started to reconstruct and revitalize. Isfahan, Arak, Khorasan, Orumiyeh and Tabriz Petrochemical complexes were constructed and Bandar Imam Petrochemical Complex was also developed. This happened at the end of Country Second Development Plan and country petrochemical products surpassed 12 million tons per year.

The fourth period –called stabilizing and sudden growth period- started in 1999 and has been continued till now.

Nouri (Borzouyeh), Pars, Jam, Zagros, Pardis, and Mehr are considered world well-known complexes in producing petrochemical and polymer products.^[3]

Main activities

See also: National Iranian Oil Refining and Distribution Company and Petrochemicals

NIPC's major activities are production, sale, distribution and export of chemicals and petrochemicals. Currently allied with 56 subsidiaries, including 9 production complexes and 18 project implementing companies, NIPC operates as a mother company handling policy-making, planning, directing and overseeing the activities of its subsidiaries and affiliates.

As at end of 2009, Iran’s total annual petrochemical production capacity stood at 34 million tonnes.^[4] In 2010, Iran produced 26% of the total petrochemical output in the Middle East, second behind Saudi Arabia.^[5]

The focus over the past few years has been on products which use natural gas as feedstock; in particular, methanol, ethylene, propane and butane. This is because the profit margins for crude oil and naphtha-consuming petrochemicals are continuously eroding due to the competitiveness of the market and the high price of feedstock.

National Petrochemical Company (Quantity: thousand tons / Value: million USD)^[6]

Product	Domestic sale - Quantity/Value (2003)	Exports - Quantity/Value (2003)
Chemicals	749 / 232	804 / 217
Fertilizers	896 / 99	2069 / 138
Polymers	105 / 76	842 / 555
Aromatics	335 / 172	167 / 73
Fuel & hydrocarbons	2459 / 646	683 / 140
Total:	4544 thousand tons / $1225 million	4565 thousand tons / $1123 million

Main products

Iran has a diversified basket with more than 70 products.^[4] The main exports are polyethylene, methanol, benzene, ammonia, sulphur, PVC and propylene.^[7] Iran exported $8.613 billion worth of different types of petrochemical products in Iranian year 2010-2011.^[8]

Methanol: Iran is a key player in supplying the world’s methanol demand. Currently, Iran has the capacity to produce more than 5 million tonnes of methanol, which constitutes 10% of the world’s methanol production. Of this amount, approximately 90% is exported.^[4]

Ethane: In addition, Iran has a competitive advantage in the gas consuming stream of the petrochemical industry due to its vast reserves of natural gas. In the Assalouyeh region near the South Pars gas field in the Persian Gulf, Iran is able to convert raw gas to ethane (a raw material for the petrochemical industry) and then to petrochemical products at a gross margin of up to 88%. In 2009, Iran consumed domestically over 95% of the natural gas that was produced.^[4]

Expansion of the petrochemical industry

See also: Assaluyeh and South Pars

In 1989 the Planning and Development Department of NIPC initiated, with the help of other related institutions and individuals, a long-term study on the "Strategic Plan for the Development of the Petrochemical Industry in Iran". Considering national and international factors such as the local market, export potentials, feedstock availability and profitability, a 25-year development plan, consisting of five development phases, was drawn up.^[9]

Business Monitor International (BMI) estimates that in 2009, Iranian petrochemicals exports will be around $7.9 billion, 32 percent above the previous year. Iran hopes to implement 47 new petrochemical projects by the end of the Fifth Five-Year Economic Development Plan in 2015 at a cost of $25 billion, adding a total of 43 million tons per annum (tpa) to the capacity.^[10][11] Iran will represent at least 5.3 percent of global petrochemical output and 36 percent of Middle Eastern production once those projects become online. The Oil Ministry has set targets for annual production of 11.5 million tpa of ethylene, 11.5 million tpa of polymer and 3.4 million tpa of urea, with a target of becoming the world’s leading producer of methanol with 7.5 million tpa of methanol capacity, which represents 18 percent of global capacity.^[12]

Iran National Petrochemical Company's output capacity will increase to over 100 million tpa by 2015 from an estimated 50 million tpa in 2010 thus becoming the world' second largest chemical producer globally after Dow Chemical with Iran housing some of the world's largest chemical complexes.^[13][14][15]

The Jam Petrochemical Complex (JPC) is currently the largest ethylene producing unit in the world.^[16]

Research & development

See also: Science and technology in Iran

NIPC is investing more on its R&D activities: this includes carrying out joint research projects with local institutions and universities; systematic link with local and foreign research centers; and design and operation of pilot plants for research purposes.^[9]

Privatization

See also: Privatization of the petroleum industry in Iran and Iranian Oil Bourse

Local and foreign, is essential for sustained growth of the petrochemical industry in Iran. Policies for encouragement of private sector participation include allocating NIPC shares to private sector both inside and outside of Iran; supporting local private sector investments in the petrochemical industry; supporting local engineering firms and production companies; allocating parts of engineering, and most of construction jobs, to the local private sector; and allowing the private sector to invest in new projects in the petrochemical industry.^[9]

NIPC plans to privatize 17 subsidiary companies by the end of 2007.^[17] All shares of domestic petrochemical firms will be offered to the public in the frame of a holding company by the end of 2010.^[18] The petrochemical industry is also a key industry on the privatization list. At least 5 more petrochemical companies are expected to undergo privatisation over the next 3 years.

Feedstock price

For several years, Iranian petrochemical companies have enjoyed significant discounts from the government on their natural gas feedstock, in comparison to global prices. Even with the partial removal of governmental subsidies on natural gas as part of the economic reform plan, these companies remain highly profitable and retain their global competitive advantage.

According to the 2010 Iranian Economic Reform Plan, by 2015, petrochemical companies, which use natural gas as their feedstock (rather than fuel), will pay no more than 65% of the average export price (rather than 75% charged to the general population) for a period of 10 years.^[19]

NIPC affiliate companies

See also: Iran's major domestic contractors in the petroleum industry and List of Iranian companies

Company	Location	Year founded	Employees[20][21]	Production (as of 2009)[21][20][22]	Costs[22]	Remarks
Khorasan Petrochemical Co.	Khorasan	1996		fertilizers including urea, ammonia and crystal melamine		privatized co.
Tabriz Petrochemical Co.	Tabriz	1989	978	petrochemicals including ethylene and propylene	new projects: $35 million
Isfahan Petrochemical Co.	Isfahan					privatized co.
Arak Petrochemical Co.	Arak	1987	1,898	petrochemicals including ethylene and polyethylene		One of the largest privatized co. on TSE[23] Affiliate companies: Bakhtar[24] - Andimeshk, Chahar Mahal Bakhtiari, Gachsaran, Hamedan, Kermanshah, Kordestan, Lorestan, Mahabad, Mamasani, Miandoab, Kavian, Dehdasht.[25]
Kharg Petrochemical Co.	Kharg					One of the largest privatized co. on TSE[23]
Shiraz Petrochemical Co.	Shiraz	1959	2,261	fertilizers including urea, ammonia and methanol		affiliate: Kermanshah petrochemical co.
Razi Petrochemical Co.	near Bandar Imam and Petzone	1968	2,100	fertilizers including ammonia, urea, phosphoric acid and sulphuric acid		Linked to Iran's nuclear and missile programs.[26] Privatized co. As of 2008, owned by a Turkish consortium.
Orumiyeh Petrochemical Co.	Orumiyeh	1995		petrochemicals including crystal melamine, ammonium sulphate and ammonium carbonate		privatized co.
Bandar Imam Petrochemical Co. (formerly known as "Iran Japan Petrochemical Co.")	Bandar Imam (Petzone)	1973		production and marketing of fuel and petrochemicals including aromatics, polymers and chemicals		affiliates: Ab Niroo, Basparan, Faravaresh, Kharazmi, Kimia. One of Iran's top 100 companies.[27]
NIPC International Co.
Petrochemical Commercial Co. (PCC)				sales of petrochemical products in the international markets as well as supplying Iran’s petrochemical downstream industries		subsidiaries in England, Germany (Intra-Chem Trading Co.), China, Singapore, India, U.A.E, South Korea and Turkey.
Bu-Ali Sina	Bandar Imam (Petzone)			benzene, paraxylene, orthoxylene, light ends, raffinate, LPG, pentene, heavy aromatics and naphtha		one of the biggest petrochemical plant in Iran.
Arvand Project	Bandar Imam (Petzone)	2010		300,000 tons of polyvinyl chloride (PVC), 660,000 tons of caustic soda, 340,000 tons of vinyl chloride and 890,000 tons of ethylene dichloride,[28] color alkali (2.834 million tpy)	$1.612 billion	8th olefin project - under implementation (2009). Arvand is the largest polyvinyl chloride (PVC) producer in the Middle East.[29]
Amir Kabir Project	Bandar Imam (Petzone)	1998	700	petrochemicals including heavy polyethylene (300K tpy), ethylene, propylene[30]	new projects: $309 million	Privatized company.[31] 6th olefin project. Privatized co.
Shahid Tondguyan Petrochemical Co.	Bandar Imam (Petzone)	1998		PTA, PET-F (bottle grade), PET-G (fiber grade), PET (staple grade), PET (POY grade)		One of the largest companies in Iran.[27]
Khuzestan Petrochemical Co.	Bandar Imam (Petzone)	1997		liquid epoxy resin, solid epoxy resin, polycarbonates
Non-Basic Services Co.				services
Fajr Petrochemical Co. (Phase. 1)	Bandar Imam (Petzone)	1999		electricity, steam, nitrogen, oxygene, air, aragon, various waters		utilities required by the process plants in the Petzone.
Mobin Centralized Utility	Assaluyeh (PSEEZ)	2000		electricity, steam, nitrogen, oxygene, air, various waters	$359 million	utilities required by the process plants in the PSEEZ.
Kermanshah Petrochemical Co.	Kermanshah	1986		amonia, urea
Bisootun	Bisootun in Kermanshah	1999		LAB, HAB
Jam Petrochemical Complex	Assaluyeh (PSEEZ)			etylene: 1.320 million metric tpy to be increased to 4.2 million in few years, butadiene (115K tpy). The complex also includes a light polyethylene unit with annual production of 300,000 tons, a poly-propylene unit (with production of 300,000 tons per annum), an ethylene glycol unit (443,000 tons) and heavy polyethylene (300,000 tons).[32]	new projects: $148 million	10th olefin. World's largest ethylene unit. Privatized co. Certification: ISO-9001:2000, OHSAS-18001:1999, ISO-14001:2004, IMS.
Pardis Petrochemical Complex	Assaluyeh (PSEEZ)	2000	1000	1.75 million tonnes of urea and 680,000 tonnes of ammonia per annum[33]	$210 million (1st phase) and $450 million (2nd phase)	2nd phase was completed in July 2010.[34]
Zagros Petrochemical Complex	Assaluyeh (PSEEZ)	2004		methanol (1.650 million tpy)	$341 million	Participation of Ghadir Investment Company (Ghadir Urea) in 4th & 6th Olefin.[35] Privatized co. Zagros Petrochemical is the world's largest methanol producer. As of 2011, it had a production capacity of 3.3 million tonnes per annum.
Pars Petrochemical Complex	Assaluyeh (PSEEZ)	1998		include ethane, propane, butane, gasoline, ethylene benzene and styrene monomer[36] (1.245 million tpy)	$535 million	participation in Aryasasol. The styrene monomer plant in Pars Petrochemical complex is the largest such plant in the world which produces 600,000 tons of this product annually.[36] Privatized company. Major shareholder as of 2010: Armed Forces Pension Fund (SATA)[37]
Mehr Petrochemical Plant	Assaluyeh (PSEEZ)			petrochemicals including HDPE (300K tpy)	$231 million	partner: Japan.
Morvarid Petrochemical Plant				500,000 tpy ethylene[38][39]	$422 million	privatized co.
Marun Petrochemical Complex	Bandar Imam (Petzone)			petrochemicals including low density polyethylene and olefin		affiliate: Laleh (LDPE project) - under implementation. Privatized company. Major shareholder as of 2010: Armed Forces Pension Fund (SATA)[37]
Arya Sasol Polymer Co.	Assaluyeh (PSEEZ)	2009		400,000 tons of ethylene, 90,000 tons of C3 cut, 300,000 tons of medium and heavy polyethylene, and 300,000 tons of light polyethylene	$3.5 billion	9th olefin. Partner: South Africa (Sasol). Privatized co.
Nouri (Borzouyeh) Petrochemical Complex	Assaluyeh (PSEEZ)	1999	380	4.5 million tons of petrochemicals, including benzene, liquefied petroleum gas, raffinate, heavy aromatics (2.5 million tpy), orthoxylene and paraxylene		world’s largest aromatics producing complex.[40]
Fanavaran Petrochemical Co.	Bandar Imam (Petzone)	1998		1 million tons of methanol per year, 140,000 tons of carbon		privatized. Methanol to project [MTP] - vinyl acetate monomer project [VAM]. Fanavaran Petrochemical, Iran’s second largest methanol producer, was the first to be privatised.
Abadan Petrochemical Co.	Abadan	1966		PVC, caustic soda, DDB		privatized co. See also Abadan Refinery
Polica Nowin Industrial Polymers Co.	Karaj	2003		pipe, soft granule, joints & fittings, mixed powder		privatized co.
Farabi Petrochemical Co.	Bandar Imam (Petzone)	1973		dioctyle phetalat (DOP), phthalic anhydride (PA)		privatized co.
Iran-Carbon	Ahwaz	1974		industrial coke		privatized co. Certification: ISO-14001: 2004, ISO-9001: 2000.
Petrochemical Development & Management Co.				services
Rahavaran Fonoon Petrochemical company	near Bandar Imam and Petzone	1998		educational and training services
VenIran Petrochemical Company (VIPC)	Assaluyeh (PSEEZ)	planned		1.6 million tonnes of methanol per year	500 million euros	Joint-venture with Venezuela.[41]

Foreign investment

See also: Foreign Direct Investment in Iran

In accordance with the government policy on rapid development of the petrochemical industry, many steps have been taken to make foreign investments in this industry more attractive for our future joint-venture partners. Such actions include creation of special industrial economic zones, revision of legal to taxes and tariffs, guarantee of capital and profit transfer, and providing the required utilities and the needed infrastructure for industrial and commercial operations. The availability of a highly trained but inexpensive work-force, cheap feedstocks and a sizable internal market, will also work in Iran's favor, to attract foreign investment.^[9][42]

Special industrial economic zones

See also: Free Trade Zones and Special Economic Zones in Iran

To provide a suitable environment for attraction of foreign and local investments in the petrochemical industry, NIPC has made a great effort to develop two special economic zones, one in Bandar Imam in the town of Mahshahr called "Petrochemical Special Economic Zone (Petzone)" and the other in Assaluyeh named "Pars Special Economic/Energy Zone (PSEEZ)".

As of 2010, the most important Petrochemical projects in the Pars Special Economic Energy ‎Zone are: ‎

‏9th Olefin, ‎‏10‏‎th Olefin, ‎‏4‏‎th Methanol, ‎‏4‏‎th Urea and Ammonia, Ethane ‎recovery, Styrene Monomer and Polystyrene, Petrochemical Port, ‎centralized utilities, ‎‏6‏‎th Methanol and DME.‎ ‏11th Olefin, ‎‏12‏‎th Olefin, ‎‏6‏‎th Urea and Ammonia, ‎‏8‏‎th Urea and ‎Ammonia and HDP Assaluyeh.‎^[35]

Petrochemical Exporting Countries Forum (PECF)

See also: Iranian Oil Bourse and Gas Exporting Countries Forum

Iran has proposed the creation of a Petrochemical Exporting Countries Forum (PECF) which aims at financial and technological cooperation among members, as well as product pricing and policy making in production issues. According to the Managing Director of National Iranian Petrochemical Company (NIPC), Abdolhossein Bayat, Iran, Saudi Arabia, UAE, Russia, Qatar, and Turkey are potential members of PECF.^[43]

See also

Iran portal

• Petroleum industry in Iran
• Iranian Oil Bourse - Trading in petrochemical products
• Ministry of Petroleum of Iran
• National Iranian Oil Company
• The Industrial Corridor of Asalouyeh
• Marun petrochemical complex
• Privatization in Iran
• Ghadir Investment Company
• List of Iranian Research Centers (Polymers)

References

1. ^ Press TV - Iran exports $570M of petrochemicals
2. ^ Iran
3. ^ http://www.presstv.com/detail.aspx?id=102040&sectionid=351020102
4. ^ ^{a b c d} http://www.turquoisepartners.com/iraninvestment/IIM-Jun10.pdf
5. ^ http://www.iran-daily.com/1389/9/1/MainPaper/3831/Page/4/Index.htm#
6. ^ http://www.irantradelaw.com/wp-content/uploads/2010/03/Irans-Foreign-Trade-Regime-Report.pdf
7. ^ http://www.iran-daily.com/1389/9/1/MainPaper/3831/Page/4/Index.htm#
8. ^ http://english.farsnews.com/newstext.php?nn=9001200631
9. ^ ^{a b c d} http://www.parstimes.com/business/petrochemichal_industry.html
10. ^ http://www.iran-daily.com/1388/3391/html/economy.htm
11. ^ http://www.iran-daily.com/1388/12/2/MainPaper/3622/Page/4/Index.htm
12. ^ http://www.iran-daily.com/1388/3421/html/economy.htm
13. ^ http://www.allbusiness.com/finance-insurance/credit-intermediation-related-activities/4022282-1.html
14. ^ http://www.tehrantimes.com/index_View.asp?code=212109
15. ^ http://www.sabic.com/corporate/en/newsandmediarelations/speeches/20050330.aspx
16. ^ http://de.statista.com/statistik/studiendetail/studie/2158521/q/iran/p/1/
17. ^ Iran to privatize 17 petrochemical companies by March 2007
18. ^ http://www.tehrantimes.com/index_View.asp?code=199802
19. ^ "Iran Investment Monthly". Turquoise Partners. 2009-01-11. http://www.turquoisepartners.com/iraninvestment/IIM-Nov09.pdf. Retrieved 2010-05-25. 
20. ^ ^{a b} http://www.zawya.com/cm/profile.cfm/cid1002386/National%20Petrochemical%20Company
21. ^ ^{a b} http://petrochem-ir.net/plant-en.html
22. ^ ^{a b} http://www.iran-daily.com/1388/3410/html/economy.htm#s382359
23. ^ ^{a b} http://www.zawya.com/story.cfm/sidZAWYA20071007041453/ir/:%20Top%20Firms%20Relegated%20In%20Bourse%20Rankings
24. ^ http://www.zawya.com/cm/profile.cfm?companyid=1002733
25. ^ http://www.zawya.com/cm/profile.cfm?companyid=1005137
26. ^ http://www.iranwatch.org/suspect/records/razi-petrochemical-company-(rpc).html
27. ^ ^{a b} http://www.imi.ir/imienglish/imi100/
28. ^ http://www.iran-daily.com/1388/3443/html/economy.htm#s390960
29. ^ http://mehrnews.com/en/NewsDetail.aspx?NewsID=1130347
30. ^ http://english.farsnews.com/newstext.php?nn=9001200631
31. ^ Turquoise Partners: Iran Investment Monthly (February 2011) Retrieved April 30, 2011
32. ^ http://www.iran-daily.com/1390/6/22/MainPaper/4051/Page/4/Index.htm#
33. ^ http://www.turquoisepartners.com/iraninvestment/IIM-Aug10.pdf
34. ^ http://www.presstv.com/detail.aspx?id=136458&sectionid=351020103
35. ^ ^{a b} http://www.pseez.ir/petrochemical-en.html
36. ^ ^{a b} http://www.tehrantimes.com/Index_view.asp?code=218868
37. ^ ^{a b} "Iran gives stakes in petchem, power units to army fund". Reuters. 2010-04-10. http://in.reuters.com/article/worldNews/idINIndia-47587620100410. 
38. ^ http://www.turquoisepartners.com/iraninvestment/IIM-Aug10.pdf
39. ^ http://www.presstv.com/detail.aspx?id=136458&sectionid=351020103
40. ^ http://www.iran-daily.com/1388/3445/html/economy.htm#s391422
41. ^ http://www.turquoisepartners.com/iraninvestment/IIM-Sep10.pdf
42. ^ http://previous.presstv.ir/detail.aspx?id=139817&sectionid=351020103
43. ^ http://www.presstv.ir/detail.aspx?id=137666&sectionid=351020103

External links

• Official NIPC's Website
• NIPC affiliated companies - interactive map
• Iran Petrochemicals Report Q1 2011
• Overview of Petrochemical Industry in Iran
• New Petrochemical Plants Due in 2010
• List of NIPC's current projects (2009)
• List of project at PSEEZ (2010)

Specialized reports

• Ethylene Dichloride (EDC) Industry Outlook in Iran to 2015
• Toluene Industry Outlook in Iran to 2015
• Acetic Acid Industry Outlook in Iran to 2015

Companies portal