Phase III of Pardis Petchem Plant
For Iran, whose motto is to minimize sales of raw materials, development of petrochemical units is the most important step for reaching its objectives. Meanwhile, it seems that the sharp oil price decline to below $50 would also justify avoiding crude oil and natural gas sales and instead, supplying products of higher value-added. In this regard, different projects have been defined in the second phase of Assaluyeh that would help boost Iran’s downstream products and earn the country revenue.
In this phase, there are prioritized projects that would help enhance Iran’s income from petroleum products and development of petrochemical industry. Phase III development of Pardis Petrochemical Plant is one of these projects. This project started when Iran was under toughest ever international sanctions. Despite all restrictions, Iran is just steps away from starting up this project.
Bahman Zamani Qaravoshi, CEO of Pardis Petrochemical Plant, has said that this phase would become operational before the current calendar year ends in March 2017.
95% Progress in Phase III
Pardis Petrochemical Plant is one of the leading producers of urea and ammoniac that is currently operating in two phases. In terms of capacity, it is one of the largest in the Middle East in urea and ammoniac production. Once Phase III becomes operational, it will be among the top petrochemical units in the world.
Zamani said before Phase III of Shiraz unit was launched, urea and ammoniac production in Iran stood at 4.4 million tons, half of which was supplied by Pardis. After Phase III of Shiraz unit became operational, the urea and ammoniac output reached 5.5 million tons. It would again rise to 6.6 million tons once Phase III of Pardis comes online. Pardis would make up 50% of the country’s petrochemicals production capacity.
Currently, two phases are operating with ammoniac production capacity of 2.15 million tons and urea production capacity of 1.16 million tons.
Construction of Phase I of this plant started in 2001 and lasted six years. Construction of Phase II began in 2004 and lasted six years. The two phases are now producing at rated capacity.
Phase III, which is among the most important projects in Phase II of Assaluyeh, started in 2011.
“Phase III is a new project, but it resembles Phases I and II. It started in 2011 and will come online this year,” said Zamani. “Phase III has had 95%progress: Ammoniac unit has progressed 96% and urea unit 93%.”
Domestic Manufacturing at 60%
Like Phases I and II, Phase III has a production capacity of 1,075 million tons of urea and 680,000 tons of ammoniac.
After startup of Phase III, the production capacity of the entire plant will go from 2.15 million tons of urea to 3 million tons and from 1.68 million tons of ammoniac to 2.04 million tons. The total capacity of this plant will rise from 3.51 million tons to 5.265 million tons. That would be a great step in line with the objectives of the company and the country’s petrochemical sector.
Currently, Pardis accounts for 7 to 8% of Iran’s total petrochemical output. That share will increase after Phase III is launched.
“At present, Pardis is the third or fourth company in terms of production capacity and after Phase III is launched it will be among the top producers,” Zamani said.
Another important point with Phase III of Pardis is that 60% of this phase has so far been handled by domestic companies. He said that domestic companies also accounted for the manufacturing of 50-60% of Phases I and II.
Cooperation with Foreign Firms
In this project, cooperation was not limited to domestic companies. The CEO of Pardis said foreign companies had been involved in the project.
“We worked with different foreign companies. In the first and second phases, they were mainly the Japanese Toyo and Chiyoda companies. We got our licenses for the ammoniac unit from Britain’s M W Kellogg, for the urea unit from the Dutch Stami Carbon and for the granulation unit from Belgium’s HydroAgri,” said Zamani.
He added that the basic and detailed engineering activities had been handled by a consortium of Japan’s Toyo and Chiyoda and Iran’s Petrochemical Industries Design and Engineering Company (PIDEC). Various Iranian companies were in charge of installation.
For the third phase, Zamani said, licenses were received from the same companies.
He said Phase III was different from the first two in the sense that the country was under tough unjust Western sanctions in 2011.
Regarding suppliers of equipment, he said: “Some equipment was supplied domestically, and some other was supplied by European companies.”
He said that the control system belongs to Yokogawa, safety and control valves were purchased from Germany, Italy and France; while relief valves were purchased from Spain. Some South Korean companies were also among suppliers of equipment. Some Iranian companies were in charge of installation.
India to Buy 70% of Products
Over recent years, Pardis has not had any exports due to restrictions emanated from current circumstances. Urea had to be consumed domestically. But Pardis started exporting urea in 2009.
Zamani said India was the first buyer of Iran’s urea, adding: “After some time, 70% of products went to India and the remaining 30% were exported to other countries.”
“Pardis is currently exporting its products to 25 countries,” he added.
Senegal, Ivory Coast, Nicaragua, Brazil, India, Costa Rica, Mexico, Mozambique, Tanzania, Uruguay, Guatemala, China, South Africa, Brazil, Syria, Turkey, Iraq, Thailand, Spain, France, Germany, Bulgaria and Italy are among the importers of Pardis products.
After the implementation of Iran’s nuclear deal with world powers, dubbed the Joint Comprehensive Plan of Action (JCPOA), five more European companies have been added to the list of Pardis buyers.
Referring to past restrictions imposed on exports, Zamani said: “At present our exports stand at 1.5 to 1.7 million tons a year of urea. After sanctions were imposed, ammoniac exports were halted because of problems related to special vessels needed to carry ammoniac which has its specific properties. Ammoniac exports resumed in 2014 and currently our surplus ammoniac mainly goes to India.”
800mcm Feedstock for One Phase
Pardis Petrochemical Plant feeds on natural gas supplied by South Pars gas field in southern Iran.
Zamani said that each phase consumes 670 mcm of natural gas a year. But this figure would be around 800 mcm for Phase III.
The reason is that the first and second phases of utility, i.e. water, electricity, nitrogen and water steam, are handled by Mobin company, while Phase III is independent and it produces water steam inside itself. Therefore, it was decided that even water steam for phases I and II be produced by the plant itself so that dependence on Mobin would be reduced. That is why gas consumption in Phase III is more than that of the two previous phases.
Domestic Financing
JBIK’s credit line has been used for the first and second phases, but the third phase was denied any foreign credit due to sanctions.
Zamani said these restrictions gave cause for the domestic financing of the project.
“The installments for the first and second phase that have been fully paid were around 400 million Euros. But in Phase III, nobody volunteered for financing because of sanctions. Therefore, Phase III costs were higher than equity and domestic investment,” he added.
He said that more than 430 million Euros has so far been spent on the project. This sum has been provided by equities and the company’s profits. The ammoniac unit will come online in 2016 and the urea unit in early 2017.
Zamani also said that the technology applied to Phase III is up-to-date, while pollution of air, water and soil has been mitigated to its minimum level.