Hassan Abbaszadeh, Deputy Petroleum Minister and Managing Director of
the National Petrochemical Company (NPC), made the remarks during a visit to
the Bushehr Petrochemical Complex. He cited a persistent lack of coordination
between upstream and downstream units as a critical challenge undermining the
sector's efficiency.
"Despite the theoretical appeal of an integrated value chain,
we've witnessed disproportionate growth favoring upstream developments, leading
to underutilized capacities and, in some cases, the flaring of valuable
feedstocks like ethylene," Abbaszadeh told reporters.
The official said that recent progress at the Bushehr complex,
including the near-completion of its olefins and monoethylene glycol (MEG)
units, reflects positive strides toward closing the value chain. "These
units are now ready for operation, significantly advancing the project’s
production capabilities—from sour gas intake to basic chemicals and downstream
derivatives," he said.
Abbaszadeh pointed to the Parsian zone as a cautionary example, where
upstream ethylene production has outpaced the readiness of complementary
downstream units. "Such misalignment leads to waste, and it could have
been avoided through balanced planning," he noted.
He revealed that an estimated 20% of Iran's petrochemical capacity
remains idle due to similar disconnects. "We have around 3 million tonnes
of ethane and one million tonnes of refined product available, but project
delays in the midstream and downstream have disrupted the value chain."
In response, NPC has initiated a range of practical measures,
including partnerships with companies operating flaring systems to capture
excess gases. Although execution has lagged, Abbaszadeh said negotiations are
underway to activate these capacities and redirect surplus gas as feedstock.
"Even lean gases like excess methane, if managed economically,
can be sold at competitive rates—around 18 to 25 cents per cubic meter,"
he said, adding that detailed modeling is being led by NPC teams to validate
the strategy.
Abbaszadeh also called for a risk-based approach to securing richer
ethane feedstock for Bushehr and suggested that discount models on upstream gas
prices—already piloted elsewhere in the industry—could be replicated to improve
project economics. "This could make sour gas projects commercially viable
and prevent further delays," he said.
He urged prompt engagement with decision-making bodies, including the
Planning and Budget Organization, to implement the proposed changes. “If this
is the strategy, then we must act now,” he said, emphasizing the six-month
timeline required to formalize the new model.
Addressing recent issues with foreign currency debt repayment at
Bushehr, Abbaszadeh pledged support to ensure the Central Bank’s confidence in
the project’s financial soundness.
“We will work to reassure the Central Bank that this is a reliable
project, and that resources are being put to efficient and productive use,” he
concluded.