Through Heck And High Prices

What are your plans for the newly established Persian Gulf Star Refinery?

Iran possesses the second-largest gas reserves in the world and, together with Qatar, owns the world’s largest gas field, the South Pars gas field. At the moment, 24 of its phases are in operation, which gives us 25 million cbm of gas per day, plus 40,000bpd of gas condensate for each phase. In the process of producing gas, we are confronted with large amounts of condensate, for which we need to find a proper use. With the largest population in the Middle East and the largest industry sector of all regional energy-producing countries, there is a high demand for gas in Iran. At the moment, around 80% of Iranians use natural gas as their main source of energy. Also, most of our power stations run on combined cycle and the gas turbines are fueled by natural gas. At the same time, we have the opportunity to export the natural gas through pipelines to Turkey and Europe. In the future, we may even supply to Pakistan and India. This policy was implemented during the sanctions, as Iran used to be a net importer of gasoline. The demand for gasoline in Iran is high and gradually increasing. The Persian Gulf Star Refinery will produce Euro-4 standard gasoline, and will hopefully allow Iran to become a net exporter of gasoline. The Ministry of Petroleum also wants to transfer all the gasoline stations to the private sector. We want to take over some of these gasoline stations and create a new brand of stations to sell our brand of fuel.

What is your assessment of the contribution of TAPPICO to the development of the petrochemical industry in Iran?

Petrochemicals are one of the best industries to invest in because of the price of the feedstock. We oversee around 20 subsidiary companies fully under our management. We also have many affiliated companies in which we have board seats. Our total market share exceeds 50% and we are present in all petrochemical industries of Iran. We are also active in the production of bitumen and lubricants. We control over half of the Iranian tire market. We are also active in the paper and wood industries and are about to start on two megaprojects converting methanol to propylene.

What potential do you see in other countries and what markets do you target for further growth?

China and India are our greatest opportunities for the future, though there is also a great deal of potential in countries like Japan, Malaysia, Singapore, and Indonesia.

What is your strategy for reaching investors and partners for joint ventures inside and outside of Iran?

Iranians are a peaceful people who, like everybody else, merely want a good life. Next to this we have great access to gas and oil and an abundance of petrochemicals. Our gas fields are particularly rich, as the gas is of high quality with great methane proportions. This creates huge potential for investors. Until the end of 2018, the next phases of construction and operation of the Persian Gulf Star Refinery will be one of the main priorities. We will improve the infrastructure and quality of our human resources through training to ensure we have the right person in the right place.

What is your outlook for TAPPICO in the year to come?

We are present in almost all Iranian petrochemical companies and have a big basket of different products. Our share in the stock market is strong. When the price of crude oil fluctuates, this has an immediate impact on petrochemical products that are based on liquid feed stock. Because our feedstock is gas and not liquid, we are affected by the fall in prices to a much lesser extent. On top of that, the price of gas is not an internationally standardized price, such as with crude oil, but a regional price, which is different in Europe, the US, and the Middle East.