IHS Markit: sanctions relief strengthens NPC Iran's petrochemical outlook

industrial 720706 1280IHS Chemical NPC Iran Competitive Company Analysis state that NPC Iran is the second-largest producer and exporter of petrochemicals in the region. (Image source: Skeeze/Pixabay)The IHS Markit report entitled, IHS Chemical NPC Iran Competitive Company Analysis, stated that NPC Iran is the second-largest producer and exporter of petrochemicals in the Middle East, only behind SABIC of Saudi Arabia

Iran’s chemical production capacity was more than 57mn metric tons (MMT) in 2014, of which its output capacity was 42.5 MMT. Its exports in 2014 stood at 14.3 MMT by volume, valued at more than US$14bn.

The research team at IHS Markit estimates that NPC Iran’s current petrochemical production capacity is just below 60 MMT. Iran missed its goal of producing 100 MMT per year by 2015. This is  due to tightening restrictions on the flow of capital and goods, as well as limited access to necessary technology, parts, and materials.

“NPC Iran has traditionally been a regional producer of petrochemicals, but with sanctions relief, the company expects to significantly expand its output capacity and increase its exports to meet demand outside the Middle East,” said Mohit Sood, senior principal chemical analyst at IHS Markit and lead author of the NPC Iran report. “The company has an aggressive development plan and expects its total petrochemical output to reach 180 MMT tons per year by 2025, which, if achieved, will more than quadruple its 2014 output capacity,” Sood said.

“Economic sanctions on Iran, as well as technology constraints and mechanical problems, led to construction-related delays, causing cancellations and start-up issues for several Iranian projects,” Sood said. “Differences in the timing of the completion of feedstock and derivative units also contributed to poor operating performance. The sanctions relief once fully realized is expected to remove operational bottlenecks and strengthen the outlook for Iranian operations.”

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