Reducing crude and semi-processed exports while completing value chains is a core pillar of Iran’s resistance economy policy and the government’s broader transformation agenda. Under the country’s Seventh National Development Plan, Iran’s methanol production capacity is set to remain substantial, creating a significant opportunity—if properly planned—to move downstream and generate higher value-added products.
In recent years, rising methanol output combined with its limited use in domestic development projects has resulted in large volumes of Iranian methanol being exported in raw form. With China as Iran’s primary methanol buyer, market concentration has weakened the bargaining power and competitiveness of domestic producers. As a result, developing the methanol value chain and shifting toward higher value-added products has become a strategic imperative for Iran’s petrochemical industry.
Traditional methanol downstream products such as acetic acid, polyacetal, and formaldehyde are relatively limited in scale. While methanol-to-olefins pathways—producing ethylene and propylene—absorb larger volumes, they require substantial capital investment and are only economically viable when paired with further downstream polymer and derivative units, significantly increasing project complexity and cost.
Beyond petrochemicals, methanol also offers fuel-related applications. Rising gasoline consumption, the heavy capital requirements and long construction timelines of new refineries, constraints on access to advanced technologies, and the slow pace of vehicle electrification have all contributed to persistent gasoline imbalances. These challenges have manifested in fuel pricing pressures, import requirements, and foreign exchange burdens in annual government budgets. At the same time, they present a development opportunity: leveraging advanced petrochemical conversion technologies to increase the supply of high-quality fuels and enhance economic resilience.
Drawing on the accumulated expertise of Iran’s academic and petrochemical research community, the technology required to produce gasoline from methanol is now technically feasible. In China, the rapid expansion of vehicle electrification and improved refinery margins under recent oil price conditions have freed up installed capacity, creating opportunities for technology transfer to Iran.
In addition to the feasibility of technology transfer and maximum localization, methanol-derived gasoline can be produced with octane ratings of 92 to 95 and in compliance with Euro 5 standards. Such fuel can be marketed at prices competitive with imported premium gasoline while contributing to reduced air pollution in major cities.
Historically, Iran’s petrochemical and refining development has been concentrated near oil and gas fields in the western half of the country. However, new national development approaches have increasingly highlighted the Makran coast. Establishing petrochemical and refining complexes in southeastern Iran along the Sea of Oman represents a new chapter in territorial development with long-term benefits for future generations.
Within this framework, the Makran petrochemical hub near Chabahar is set to become one of the country’s most important industrial infrastructures in the coming years. Persian Gulf Petrochemical Industries Company, through its ownership of Taftan Aria Petrochemical in the Chabahar Free Zone, is playing an active role in the development of this strategic hub.
Beyond feedstock, products, technology, and site selection, securing financing for methanol-to-gasoline projects is a critical factor. One of the key strengths of these projects is their significantly lower capital requirement compared to other methanol value-chain pathways leading to final products. Moreover, the government has prudently approved and announced project finance bonds specifically for methanol-to-gasoline projects, including those in the Makran region.
A critical consideration in advancing such projects is a clear understanding of Iran’s past experience with acquiring advanced petrochemical technologies. Methanol-to-gasoline technology falls within the broader category of gas-to-liquids hydrocarbon production. Although numerous initiatives to acquire this technology have been proposed in recent years, many remained at the planning stage and never reached operation.
The first essential step is to review this historical experience, bring together seasoned experts and development-minded professionals, and then rely on knowledge management and the collective expertise accumulated in Iran’s value-generating petrochemical industry. This approach can serve as a lever to successfully transfer and localize this complex and modern license, ensuring tangible benefits for both the present and future generations of the country.
Source: Shargh Daily (Petrochemical Industry Special Supplement)