Iran, US in new battle in petrochemical market

TEHRAN, Dec. 16 (MNA) – With a new rise in US unconventional gas reserves by 3 years, Iran’s petrochemical industry would a tsunami of cheap petrochemical products.

Mehr News reported that Iran’s petrochemical industry, facing the prospect, embarked on the new tactics to deal with the situation. The report said that although Iran has the greatest gas reserves with over 33 trillion cubic meters on place reserves in conventional gas sector, the US development of new methods of extraction of unconventional gas especially from Shale Gas has been the new Achilles’ heel for gas giants like Iran, Russia, and Qatar. The emergence of US unconventional gas in the market would, on the one hand, hit the international gas prices and creating a wave of rejoicing among major gas-importing countries in eastern Asia and EU, and on the other hand, decreases the margin of income for gas exporting countries.

Official reports indicated that from the beginning of 2013 with an increase in US ethane production overcapacity, more than $ 15bn has been invested in petrochemical sector to produce ethylene. Also, with an increase in ethylene production to about 36 million tons since the beginning of the year (2013) $ 8bn has been invested in US petrochemical sector in polymer and poly ethylene production.

Iran’s National Petrochemical Industry Co. deputy directing manager said the country’s ethylene production would be increased before the Vision Plan horizons through operation of new petrochemical complexes. “However, we will work to diversify our production basket to minimize the issues of emergence of the US cheap polymers to the market,” he added.

Ahmad Mahdavi, the Director General of Petrochemical Employers Association told Mehr News that along with the increase in production of gas from unconventional gas reserves drawing on Shale Gas in the US, Iran’s petrochemical industries set in the agenda the new tactical measures. “The production of unconventional gas is economically justified when the crude oil soars to more than $ 100 per barrel,” he said and that “India and China had planned to produce gas from unconventional reserves along the US.”

“Definitely, increase in gas production poses a challenge for gas-rich countries,” he believed. “This issue will be discussed during a special session with petrochemical public and private sector players attending in February 2014,” he added, and that “the best tactical measure to deal with the issue is changing production patterns, diversification of production basket and exports.”

By Mehr News Agency 

 

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