Investment Opportunities as Iranian Petrochemical Industry grows

Iran has recently revealed its new initiative for the country’s petrochemical industry, with a goal of achieving an output of 130 million tons per year by 2025, up from todays 70 million tons per year. In particular, Iran is keen to fully exploit the opportunities within China and East Asia, which are particularly focused on methanol production, and the methanol-to-olefins and methanol-to-propylene processes that they make great use of.

Iranian policy makers have made significant investment in the local methane gas-to-olefins (GTO) process, to increase Olefin output in order to meet the growing demand across the world. In fact, there have been 27 new projects launched so far, with a combined olefin output of around 23 million tons per year, and these are compromised of both private and semi-private investment groups. To move forward these projects require combined capital investment of around $30 billion, and are one of the major investment opportunities in the industry today.

The majority of these projects use the technologies preferred by the Chinese, and are demonstrably designed to meet the growing needs of that most important market, who are expected to increase their own consumption of olefins by as much as 30% in the next decade. Because Iran is in a position of exceptional raw material resources, in this case mostly gas, they are well placed to leverage those resources in the future, especially in terms of trade with China, who by contrast, have poor levels of gas resources.

As a result, with Iran in a resource rich position and well placed to exploit growth in China and East Asia, investment in both private and semi-private projects within the petrochemical industry represent a significant opportunity. Projected increases in demand across the world and vast reserves will make Iran a significant component of the global petrochemical trade in the future, and the investment opportunities available now something that is unmatched elsewhere. In other producing countries, the industry and capacity are mature, with a focus on increasing efficiency through innovation in production, Iran is uniquely placed to take advantage of new technology while expanding output as well.

Of course, with new projects announced in rapid succession and a continued program of construction planned, there are significant investment opportunities in all aspects of the petrochemical industry today, and many more in the future. With a government shaped expansion such as this, continued advancement and new projects are a given, and with defined goals targeting some of the worlds largest markets in China and East Asia, there are many more ways for investors to stake a claim in this fast-growing market.

Iran’s petrochemical industry today is poised to become a major contributor to Chinese growth over the next decade or more, and has both the natural resources and geographical location to take full advantage of the opportunity. For potential investors, the petrochemical industry in Iran is one of the core global opportunities available today.