Localization of Dena Petrochemical Company for methanol production

Five domestically-made reactors have been delivered to Dena Petrochemical Company in Asalouyeh, southern Bushehr Province, and seven more will be supplied by domestic manufacturers by the end of the current Iranian year (March 2024), the managing director of the company said.

Due to the US reimposition of sanctions on Iran in recent years, which prevented European countries to supply parts and equipment in the Energy sector to Iran, “we signed contracts with domestic and knowledge-based companies for the manufacture of the required equipment,” Hossein Hashemi was also quoted as saying by the Oil Ministry’s news agency Shana.

“One of these equipment, manufactured for the first time in the country at Arak Machine Manufacturing Corporation, is the synthesis gas production reactor, which is the beating heart of petrochemical plants,” he added.

Synthesis gas (syngas) production is the cornerstone of operations in many industries, including petrochemicals. Syngas is produced by steam reforming or partial oxidation of natural gas or liquid hydrocarbons, or coal gasification.

A contract was signed with local manufacturers in 2020 to construct more than 2,000 tons of steel structures and grating, which account for a significant part of the project.

Hashemi said the construction work in the petrochemical plant, which will create a methanol production capacity of 1.65 million tons per year, is 80% complete and would hopefully be completed by the end of next Iranian year (March 2025).

Pointing out that the plant feed is 1,306 million cubic meters of natural gas and 520 mcm of oxygen, supplied from Damavand Petrochemical Plant, Hashemi noted that a total of $400 million have been invested in the construction of the Dena Petrochemical Complex.

Dena Petrochemical Company in the Pars Energy Special Economic Zone

Dena Petrochemical Company is built on seven hectares in the second petrochemical phase of Pars Energy Special Economic Zone. It is an undertaking of Sepehr Energy Corporation, which is a subsidiary of Petrofarhang Holding Company, affiliated to the Teachers Investment Fund.

Sepehr Energy Corporation operates in the Iranian oil, gas and petrochemical sectors, and endeavors to expand the national financial, technical, economic and social capacities by managing the construction and operation of industrial projects.

It aims to create value and improve profitability by completing the value chain of the energy industry. The company also operates globally to raise the market share of these industries and facilitate the export of their products worldwide.

The current capacity of methanol production in Iran is 13 million tons per year, which is planned to exceed 20 million tons in the near future.

Methanol Projects

Petrofarhang has four methanol production units. Middle East Kimia Pars Petrochemical Company and Sabalan Petrochemical Plant have already been launched.

Two more projects, namely Dena Petrochemical Company and Siraf Petrochemical Company, will become operational in the next two years, helping raise the country’s methanol output capacity.

With the launch of Dena and Siraf plants, Petrofarhang will have a methanol production capacity of 6.6 million tons and become the largest methanol producer in the world.

Of the total annual methanol production in the country, close to 700,000 tons are sold in the domestic market and the rest is exported.

China, which has a large methanol-to-olefin capacity, is a natural target market for Iranian supplies.

Traditionally, methanol is used as feedstock to produce chemicals such as acetic acid and formaldehyde, which are used in products like adhesives, foams, plywood subfloors, solvents and windshield washer fluid.

In the petrochemical industry, methanol is used to create high-quality basic chemicals, the most important of which are formaldehyde, acetic acid, MTBE, methyl methacrylate, methyl chloride and methylamines, which are processed to produce other derivatives.

The global methanol market is expected to grow at a significant rate in the coming years, driven mainly by the increasing use of methanol (in the form of fuel and antifreeze agent) in the automotive industry.

The methanol industry has experienced an explosive growth, primarily in China and the United States, owing to significant developments in shale gas production.

Publish: May 5, 2023

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