“Iran’s petrochemical industries are on the verge of bankruptcy due to water shortages”

Reuters has compiled a list of major Iranian petrochemical projects whose construction or completion has been delayed due to water shortages. The lack of proper planning and information management is the reason for all of these delays.

Reuters has compiled a list of unfinished projects in Iran's petrochemical industry, citing Iranian media reports and comments from businessmen, managers and major shareholders. The list shows that the ambitions of Iranian officials to make the most of the country's oil and gas reserves lack reliable planning and accountable management.

1. Khorasan Petrochemical

The establishment of the second phase of the Khorasan Petrochemical Project was approved in 2015 and was supposed to produce 660,000 tons of urea and 4,000 tons of melamine per year. The Tamin Oil, Gas and Petrochemical Investment Company (TAPICO), a major shareholder in the project, announced in the summer of 2019 that the second phase of the Khorasan Petrochemical Project had not yet begun because it did not have sufficient water resources to produce its products.

2. Kermanshah Petrochemical Industries

The expansion of these industries' capacity to produce 120,000 tons of propylene has been halted due to water shortages. Propylene is the second most consumed base material in the petrochemical industry in the world.

The project manager told Reuters that the project, which has all the necessary permits, was supposed to be completed and operational by 2018, but so far (fall 2019) only 30 percent has been completed. He announced the new completion date for the project as 2022.

3. Firuzabad Petrochemical Project, Related Industries

The project, which was set to produce $500 million worth of ethylene, began a decade ago, but now its managers say “the project’s water needs were not properly assessed and the project has remained unfinished due to water shortages.” Fasa Petrochemical Company and Darab Petrochemical Company, which each own a 30 percent stake in the Firuzabad Petrochemical Project, did not respond to Reuters’ request for comment.

Four other industrial projects that were supposed to use ethylene produced in Firuzabad have also been shut down. The companies involved in these projects, Jahrom Petrochemical, Darab, Estahban, and Fasa Petrochemical, declined to comment.

4. Golestan Petrochemical

Twelve years after land was purchased for the Golestan Petrochemical Plant, there is still no news of its opening. Officials told state-run Iranian Radio and Television that water shortages were the reason for the project’s delay. Golestan Petrochemical Plant was supposed to produce 677,000 tons of ammonia and more than 1,000 tons of urea per year. Project officials did not respond to Reuters’ questions.

5. Kohdasht Petrochemical

Seven years after the official inauguration of the Kohdasht Petrochemical Project, Tasnim News Agency has described the project as “a fenced-off wasteland.” Kohdasht Petrochemical was supposed to produce 11,000 tons of isobutane, 80,000 tons of diethylhexanol, and 45,000 tons of ethylene annually. A businessman familiar with the project said that the lack of water supplies and difficult access to raw materials are the reasons for the delay in the project.

6. Dena Petrochemical

Farmers around the Dena Petrochemical Complex in Boyer-Ahmad are deeply concerned about the impact of the project on the region’s water resources. IRNA news agency says that 85 percent of the water consumed in Kohgiluyeh and Boyer-Ahmad provinces is for agriculture, 12 percent for domestic use, and 3 percent for industry. The government is calling for a change in water consumption patterns.

But the problem is that the Dena Petrochemical project requires 15 million cubic meters of water per year to provide facilities, and this has led to widespread protests by farmers in the region. Reuters reported that Dena Petrochemical Industries declined to comment on the matter.

7. Khomein Petrochemical

Water shortages are a serious problem in Khomein, in the central province. But the Iranian government had planned to set up a petrochemical plant there as well. Khomein Petrochemical was to produce 185,000 tons of polypropylene annually, using raw materials produced at refineries in Isfahan and Shazand. Reuters has not been able to reach the project’s managers.

8. Phase Two of Shiraz Refinery

Phase two of the Shiraz refinery, located near Bemo National Park north of Shiraz, was supposed to process 120,000 barrels of oil per day. Widespread opposition from environmental activists and residents around the refinery has delayed the $1.5 billion project. However, representatives from the region’s parliament insist that the project should not be moved outside Fars province. Shiraz Oil Refinery did not respond to Reuters’ request for comment.

9. Isfahan Refinery

The Isfahan Oil Refinery, which is designed to require eight million cubic meters of water per year, was supplied by the Zayandeh-Rud River. The refinery is currently facing a shortage of water resources due to drought. In 2018, Heshmatollah Ebrahimi, the refinery’s executive director, said that 50 percent of the refinery’s capacity would be lost if a long-term solution was not found.

10. Abadan Refinery

The Abadan Refinery, one of the largest refineries in Iran, was forced to temporarily suspend operations in 2018 due to damage to water pipes.

According to the head of public relations at the Abadan Oil Refinery, the decrease in the water level of the Karun River and the increase in its salinity have damaged the pipes. The cause of the salinity of the Karun River is a dam built in a salt valley along the river. This dam is also called another environmental disaster in Iran.

11. Shazand Petrochemical

Shazand Petrochemical Company has been drilling deep wells to access groundwater. The state-run IRNA news agency says that the drilling and extraction of water from these wells has deeply concerned environmental activists and experts.

An official from the company told Reuters that it is looking for a contractor to implement a 10 million euro project aimed at recycling urban wastewater for Shazand Petrochemical.

Source: DW