The status of liquefied gas production, consumption, and exports in the country, and the evaluation of the advantages of developing the liquefied gas value chain compared to raw material export
Abstract
Propylene, as one of the key products in the petrochemical industry, holds special significance. Given the extensive range of industries that use propylene as a raw material, the demand for this strategic substance is increasingly rising. Despite this growing demand, almost all of the propylene produced in the country is a byproduct of indirect processes. As a result, over the years, the country has been forced to import a significant amount of this product. Therefore, considering the existing unjust sanctions and the foreign currency dependency of the propylene chain due to imports, the development of this petrochemical chain in the country appears to be essential in order to meet domestic needs.
Some key headings of this article are:
Different approaches to liquefied gas consumption: The increased supply of liquefied gas from regions like the U.S. and Western Asia has reshaped global trade and the petrochemical sector. While the domestic sector is the largest consumer of liquefied gas, petrochemical units follow. From 2021 to 2030, growth in the petrochemical sector is expected to drive the global market.
Propylene production is shifting from naphtha crackers to ethane crackers due to shale gas in North America. Traditional methods no longer meet demand, and direct propylene production is increasing, with the propane dehydrogenation (PDH) process leading the way, especially in China. PDH units typically have capacities between 300,000 and 660,000 tons per year.
Status of Liquefied Gas Production, Consumption, and Export in the Country: Iran’s annual liquefied gas production is about 10 million tons, with the majority produced from independent gas fields, especially the South Pars field. Of this, 50% is exported, 20% is used domestically, 5% is used as feedstock for petrochemicals, and the remaining 20% is injected into the national gas pipeline due to storage limitations. In 2019, the domestic consumption of liquefied gas was 2.5 million tons, with 2 million tons for domestic and commercial use and 0.5 million tons for petrochemical feedstock. The country exported around 5 million tons of surplus liquefied gas. Injecting excess gas into the pipeline, rather than utilizing it as a valuable fuel, results in a waste of resources.
Evaluation of the Advantage of Developing the Liquefied Gas Value Chain Over Raw Export: There is high domestic demand for propylene, but a significant gap between supply and demand exists, with the market relying on imports. In 2018, Iran produced 900,000 tons of propylene, much of which was converted into polypropylene. Due to limited propylene feedstock, petrochemical plants produce less than their full capacity. Since importing propylene is not economically viable, increasing domestic production is necessary. Developing the liquefied gas value chain could lead to producing more propylene, offering benefits such as value addition, foreign currency savings, and increased government revenue.
This study was conducted at Moqavemati Economy Think Tank by Afshin GholamAlipour in the year 2022.
To read more, click here
