In recent years, Iran’s petrochemical industry has emerged as one of the key driving forces of the national economy, playing an unparalleled role in generating value added, expanding non-oil exports, and strengthening the country’s industrial infrastructure. Built upon vast hydrocarbon resources and exceptional technical and human capacities, this industry now stands at a critical juncture where its performance directly influences not only the nation’s economic balance, but also regional development trends, sustainable job creation, and Iran’s position in global petrochemical markets.
Nevertheless, the path to achieving this status has been marked by numerous ups and downs, and the industry continues to face challenges that make scientific management, targeted investment, and nationwide coordination more essential than ever. In an interview with Iran newspaper, Hassan Abbaszadeh, Iranian Deputy Oil Minister for Petrochemical Affairs, presents a comprehensive and analytical picture of the current state of Iran’s petrochemical sector—one grounded not in generalities, but in statistical realities, development plans, and forward-looking trend analysis.
Highlighting the massive 92‑billion‑dollar investment made in the sector and the achievement of a 100‑million‑ton production capacity, he also emphasizes that 22 percent of the installed capacity remains inactive. The primary reason, he notes, is the shortage of natural gas feedstock—an issue that has become one of the most critical challenges in the country’s energy economy.
Drawing on data, planning frameworks, and practical experience, the Managing Director of the National Petrochemical Company illustrates how ensuring a stable supply of petrochemical feedstock can not only pave the way for industrial development, but also reinforce the foundations of currency stability and national economic growth. This interview offers an opportunity to revisit the industry’s past trajectory, understand its current challenges, and envision a future in which the petrochemical sector continues to serve as a central pillar of Iran’s productive economy.
Question: Given the central role of the petrochemical industry in Iran’s economy, how do you assess the current state of this sector, and what are its most important development priorities?
Answer: Over the past decades, Iran’s petrochemical industry has been one of the main pillars of the national economy and a driving force of the country’s industrial development. Today, after attracting nearly 92 billion dollars in domestic and foreign investment, the industry has reached an annual production capacity of around 100 million tons. According to the targets set in the Seventh Development Plan, this capacity is expected to increase to approximately 131.5 million tons by the end of the period.
Despite these achievements, about 22 percent of the country’s installed petrochemical capacity remains idle—equivalent to more than 18 billion dollars of unutilized investment. The primary cause of this inefficiency is the challenge of securing a stable feedstock supply, which has left part of the established capacity effectively unused.
It is important to note that in the early years of developing the South Pars gas field, abundant gas production led policymakers to focus on constructing gas‑based petrochemical complexes. However, over time—and despite upstream oil and gas development—the nationwide expansion of the gas distribution network, industrial growth, population increase, and rising household and commercial consumption have created a seasonal energy imbalance. During peak winter demand, gas supply to petrochemical plants faces serious constraints. Therefore, the future development of the petrochemical industry is fundamentally tied to ensuring a reliable and sustainable feedstock supply.
Given the industry’s development goals under the Seventh Development Plan, its gas demand is also expected to rise. At the beginning of the plan, the petrochemical sector’s daily gas intake capacity was estimated at around 50 million cubic meters for feedstock and 60 million cubic meters for fuel used in process units, power generation, and utility systems. However, based on the updated targets, by the end of the plan the required gas capacity will increase to 80 million cubic meters per day for feedstock and 80 million cubic meters for fuel. In other words, the sector’s total daily gas requirement is projected to reach approximately 160 million cubic meters by the plan’s horizon.
This comes at a time when the petrochemical industry is already facing feedstock shortages. Continuation of this situation could not only increase the opportunity cost of idle capacity but also pose more serious challenges to the industry’s development trajectory and its ability to generate value.
Since the beginning of the 14th Iranian government, the National Petrochemical Company (NPC), in line with the development objectives of the petrochemical industry and with the aim of addressing existing challenges in securing feedstock for production units, has established a “Special Committee for Sustainable Feedstock Supply.” As one of the key decision‑making and policy‑formulation bodies in ensuring the stability of the production chain, this committee conducts thorough and expert evaluations of all possible pathways to guarantee a stable and optimized supply of feedstock for the country’s petrochemical complexes. The primary purpose of forming this committee is to prevent shutdowns or reductions in production capacity and to ensure maximum utilization of the nation’s installed petrochemical capacity. In essence, policymakers seek to ensure that no complex or production unit remains idle or semi‑active due to feedstock shortages, and that the substantial investments made in this sector continuously contribute to production and exports.
Question: What are the main priorities of this committee?
Answer: The Sustainable Feedstock Supply Committee pursues its mission through three strategic pillars: first, direct investment by petrochemical companies in gas fields. To guarantee long‑term stability and diversification of feedstock sources, petrochemical companies are required to actively participate in gas field development projects. This approach not only enhances the industry’s resilience against fluctuations in gas supply but also strengthens synergy between upstream and downstream sectors. Second, collection and utilization of associated petroleum gas (APG) and flare gas. A significant portion of associated gas in Iran is flared due to insufficient infrastructure—resulting in economic loss and environmental harm. The committee, in cooperation with subsidiaries of the Ministry of Oil, has initiated projects to collect, process, and reinject these gases into the petrochemical feedstock chain. Some flare‑gas recovery projects have already come online, and this year major portions of the East Karun flare‑gas recovery project (Phase 1) by Persian Gulf Bidboland Gas Refining Company and Phase 2 of NGL‑3200 will be commissioned. The expectation is that in the coming years, all flare stacks in the oil and gas sector will be eliminated. Third, national‑level energy efficiency and consumption optimization. Given the sharp rise in household and commercial energy consumption during winter, intelligent consumption management and improved energy efficiency across industries and the public sector have become unavoidable necessities. Accordingly, one of the committee’s priorities is reducing energy intensity, reforming consumption patterns, and upgrading efficiency‑enhancing technologies in petrochemical production processes. NPC has prepared 12 gas‑optimization projects for the household and commercial sectors. Last year, one of these projects—implemented jointly with two petrochemical companies and the National Iranian Gas Company in five cold provinces—yielded excellent results, enabling part of the saved gas to be allocated to the feedstock needs of those petrochemical plants. This year, under the Minister of Oil’s directive, the initiative is being pursued through the “Energy Saving Program,” and several petrochemical companies have expressed interest in investing in this area.
Question: Has the petrochemical industry taken steps toward investing in gas fields?
Answer: According to a resolution by the Cabinet, if petrochemical companies invest in the development of gas fields, the entire volume of gas produced from those fields will belong to the investing company. This creates a win‑win model: the government benefits from private‑sector capital for upstream development, while petrochemical companies secure long‑term feedstock reliability.
Within this framework, several gas fields have been designated, and the first development contract—covering the Gardan and Pazan gas fields—has been signed between the National Iranian Oil Company and a consortium consisting of Bakhtar Group, Petrofarhang Holding, and Hana Energy Gostar. The contract is now awaiting final approval. This development could mark a turning point in ensuring sustainable feedstock for the industry.
Global experience shows that when the entire value chain—from feedstock source to final product—is integrated under a single entity or consortium, production stability and economic efficiency significantly improve. This is precisely the model we aim to establish in Iran.
Question: How effective are flare‑gas recovery projects in achieving sustainable feedstock supply?
Answer: Flare‑gas recovery projects are among the most strategic and vital initiatives for achieving sustainable development in the petrochemical industry and safeguarding national resources. At a time when the country faces challenges in securing stable feedstock for petrochemical plants, these projects can play a decisive role in offsetting part of the feedstock shortage and enhancing the economic efficiency of the value chain.
According to recent estimates, if all flare gas were fully collected and processed, a significant portion of the feedstock required by the country’s petrochemical complexes would be supplied, preventing the annual loss of billions of dollars in valuable resources.
In this context, the NGL‑3100 project—aimed at collecting and recovering flare gas in the West Karun region—was commissioned this year. This project is considered one of the key components of the feedstock supply chain in southwestern Iran, and its full operation represents a major step toward reducing gas imbalances in the petrochemical sector. Alongside this initiative, Phase 2 of the Persian Gulf Howeyzeh Gas Refinery (NGL‑3200) is also nearing completion.
In parallel, the “Rehabilitation and Construction of Flare Gas Collection Facilities” project in East Karun is being implemented by Persian Gulf Bidboland Gas Refining Company. This initiative is one of the largest environmental and economic projects in the country and is expected to eliminate 59 active flares in the region. So far, 14 flares have been extinguished, and construction activities to eliminate the remaining flares are progressing rapidly.
Flare‑gas recovery not only contributes to securing sustainable feedstock for the petrochemical industry but also delivers extensive environmental, economic, and social benefits. It significantly reduces greenhouse‑gas and toxic emissions, prevents the waste of national hydrocarbon resources, and improves overall energy efficiency. Moreover, the elimination of flares symbolizes the transition of Iran’s oil and petrochemical sectors toward a green and sustainable development model aligned with national policies on reducing energy intensity and protecting the environment.
Question: You also mentioned consumption optimization alongside the development of new feedstock resources. What measures have been taken in this regard?
Answer: Energy‑consumption optimization today is not only an economic necessity but also one of the fundamental pillars of feedstock sustainability in the country’s strategic industries. The reality is that during the cold months—especially in winter—natural gas consumption in the household, public, and commercial sectors rises sharply. On certain days, these sectors account for more than 70 percent of the country’s total gas consumption. This sudden surge in demand severely restricts gas allocation to major industries, including petrochemical complexes, leaving part of the nation’s production capacity underutilized.
In response, the National Petrochemical Company (NPC), in cooperation with the National Iranian Gas Company and with private‑sector participation, launched the national “10% Energy Consumption Reduction Campaign” last year. The main objective of this initiative was to ensure that by reducing household gas consumption by just 10 percent—through public participation and social engagement—a significant portion of the feedstock required by petrochemical plants could be secured. From economic, environmental, and industrial perspectives, this initiative represents a model of intelligent energy‑resource management based on public cooperation.
In implementing this campaign, Zagros Petrochemical Company and Pardis Petrochemical Company acted as the main investors and pioneers. In addition, non‑governmental organizations played an active role—not only in supporting technical optimization projects but also in promoting public awareness and fostering a culture of responsible energy consumption.
The 10% gas‑reduction campaign goes far beyond a purely technical project; it should be viewed as a cultural, national, and participatory movement aimed at reshaping society’s perception of energy value and the need to safeguard the country’s natural resources. In practice, every cubic meter of gas saved in the household sector can be redirected to productive industries—industries that convert gas into high‑value petrochemical products, generate foreign‑currency revenues, create jobs, promote regional development, and strengthen Iran’s position in the global energy value chain.
Question: Is there a plan to use renewable energy in petrochemical complexes?
Answer: Yes. In line with national policies on sustainable development, reducing energy intensity, and transitioning toward a low‑carbon economy, the petrochemical industry has developed and begun implementing a comprehensive program to expand the use of renewable energy in petrochemical facilities. The goal is to reduce dependence on fossil fuels, minimize environmental pollutants, and diversify the energy sources used by production units.
Utilizing renewable resources such as solar and wind energy can play a significant role in enhancing the operational and environmental sustainability of the petrochemical sector. This year, petrochemical companies collectively generated more than 100 megawatts of electricity from wind and solar power plants—an important milestone in the industry’s energy‑transition pathway.
A major wind‑turbine installation project with substantial capacity is currently underway in Sistan and Baluchestan Province, one of the most suitable regions in the country for wind‑power development.
NPC’s current strategy is based on an intelligent energy‑mix model for petrochemical facilities. This means that in the near future, part of the energy required by production units will be supplied from renewable sources, while the rest will come from optimized consumption of fossil fuels. This policy aligns with national commitments to reducing energy intensity, protecting the environment, and enhancing the resilience of the country’s energy network.
The ultimate goal is for Iran’s petrochemical industry not only to maintain its position in petrochemical production but also to become a regional leader in clean‑energy technologies and carbon‑footprint reduction.
Question: Given the strategic position of this industry, how does securing a stable feedstock supply affect the country’s macroeconomic landscape?
Answer: As one of the strategic pillars of Iran’s economy, the petrochemical industry plays a decisive role in generating value added, creating jobs, and providing foreign‑currency revenues. With 73 production facilities across the country, this industry not only supplies a major share of essential industrial inputs but also holds a prominent position in Iran’s non‑oil export portfolio.
Approximately 9 percent of the country’s natural gas consumption is used in the petrochemical sector. About half of this volume is allocated to utility services—such as the production of water, electricity, and steam—while the other half serves as the primary feedstock for chemical and industrial processes, generating around 24 billion dollars in annual revenue. The importance of this issue lies in the fact that feedstock stability is directly tied to the continuity of production, export performance, and the country’s foreign‑exchange earnings. Any fluctuation in the supply of natural‑gas feedstock to petrochemical facilities disrupts production flows, reduces exports, and limits the nation’s access to foreign currency.
Currently, petrochemical exports generate roughly 15 billion dollars in foreign‑currency income each year. A significant portion of the country’s essential foreign‑exchange needs—including the import of basic goods, pharmaceuticals, industrial equipment, and raw materials—is met through this revenue stream.
For this reason, every step taken toward securing and stabilizing feedstock supply for petrochemical plants is, in effect, a step toward strengthening the foundations of national economic stability. A reliable feedstock supply ensures uninterrupted production, increased exports, an improved foreign‑exchange balance, and enhanced competitiveness for Iran in global petrochemical markets.
Overall, the petrochemical industry can be regarded as a cornerstone of Iran’s productive economy—an industry that, relying on indigenous technical expertise, skilled human capital, and extensive energy infrastructure, has succeeded in transforming the country’s hydrocarbon resources into economic value and widespread employment. Therefore, ensuring the long‑term stability of feedstock for this sector is essential for sustaining economic growth, maintaining currency stability, and advancing the country’s path toward sustainable development.
Question: With these explanations, how do you envision the future outlook of Iran’s petrochemical industry?
Answer: Relying on the country’s vast hydrocarbon resources, extensive industrial infrastructure, and highly skilled human capital, the National Petrochemical Company (NPC) has developed a long‑term strategy aimed at transforming Iran into the petrochemical hub of the region. This objective not only reflects national capabilities in energy and technology, but also represents a fundamental step toward diversifying the economy, enhancing resilience against crude‑oil market fluctuations, and expanding non‑oil exports.
Within the framework of the Seventh Development Plan, achieving an annual production capacity of 131.5 million tons of petrochemical products is the first major milestone. Reaching this target signifies the expansion of industrial capacity and the consolidation of Iran’s position among the leading petrochemical producers in the region. Yet this is not the final destination; rather, it marks the beginning of a new phase focused on qualitative transformation in the country’s petrochemical product portfolio.
The next strategic step is to shift from producing basic commodities—such as methanol, urea, and ammonia—toward higher value‑added products and completing the value chain. Achieving this goal will not only enhance profitability and global competitiveness, but also create specialized employment opportunities and strengthen downstream industries.
However, the essential and irreplaceable prerequisite for realizing all these objectives is a stable and reliable feedstock supply. For this reason, NPC—working closely with the National Iranian Oil Company and the National Iranian Gas Company—has concentrated its efforts on three key pillars: collecting and processing associated petroleum gas, direct investment in gas‑field development, and improving consumption patterns through energy optimization.
The future outlook of Iran’s petrochemical industry extends far beyond increasing production capacity. It is built on technological transformation, product diversification, environmental sustainability, and economic resilience. Becoming a regional petrochemical hub requires a comprehensive, forward‑looking, and efficiency‑driven approach. With this vision, NPC aims to transition Iran from an exporter of raw and basic materials to a producer and exporter of advanced, high value‑added petrochemical products—a transformation that will reshape not only the future of the petrochemical sector but also the broader national economy.
Question: Finally, do you have any recommendations for industry stakeholders and the public?
Answer: Iran’s petrochemical industry is one of the most dynamic and strategic sectors of the national economy. Leveraging the country’s abundant hydrocarbon resources, the scientific and technical expertise of Iranian specialists, and substantial domestic and foreign investment, it has become a cornerstone of economic growth and non‑oil exports. However, sustaining this growth trajectory and elevating the industry’s global standing requires genuine synergy among all national stakeholders. The government, private sector, academic institutions, and ultimately the public must move in a unified direction with a shared understanding of national interests. Only through such collective effort can the country achieve sustainable feedstock supply, balanced value‑chain development, and improved energy efficiency.
A key foundation for achieving these goals is promoting a culture of energy conservation. Given that a significant portion of the country’s natural gas is consumed by households during the cold season, fostering responsible consumption as a national duty is essential. Every cubic meter of gas saved is not merely a unit of conserved energy—it is an opportunity for employment, production, and economic growth.
Ultimately, the future outlook for Iran’s petrochemical industry goes beyond expanding production capacity. It is rooted in feedstock sustainability, national synergy, and a transition from raw‑material exports to high value‑added production. If all sectors align around this national mission, the petrochemical industry can become a driving force for a resilient economy and a model of sustainable development—an economy in which no unit of gas is wasted or burned, but instead transformed into employment, knowledge, and national wealth.