Petrochemical sector stays on track despite conflict, eyes annual targets

Iran’s petrochemical industry remains committed to achieving its development goals for the current year, despite disruptions caused by a 12-day conflict triggered by Israeli airstrikes, a senior official said, as per Tehrantimes.

Hossein Alimorad, director of planning and development at the National Petrochemical Company (NPC), told Shana that the industry quickly activated emergency response protocols to mitigate the impact of the conflict and maintain operational stability.

“In the first nine hours of the war, we formulated a strategic response to ensure industry readiness,” Alimorad said. “Through more than 14 focused crisis committee sessions, we managed to resolve all operational challenges and even provided support to other government entities.”

Israel launched a series of military strikes on June 12 (corresponding to Khordad 23 on the Iranian calendar), targeting sites in Tehran and other cities, including nuclear facilities, in what Iranian officials described as a violation of international law and national sovereignty. The attacks resulted in casualties among scientists, military personnel, and civilians.

Alimorad stressed that NPC remains on course to meet its strategic objectives for 2025 (Iranian year 1404), with several key projects advancing as planned. “The company is fully committed to its roadmap and continues executing programs with discipline,” he said.

Despite the recent hostilities, officials say the petrochemical sector’s robust preparedness and adherence to defined contingency protocols allowed it to maintain momentum. The sector is a cornerstone of Iran’s non-oil economy and a major source of hard currency revenue amid ongoing international sanctions.

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BASF SE has secured a new supply of Canadian butane as feedstock for its Asia petrochemical operations through a long-term commercial agreement between its trading arm, BASF Intertrade AG, and AltaGas Ltd. (Calgary, Alberta), as per Chemweek.

Shipments by way of AltaGas and Royal Vopak’s Ridley Island Energy Export Facility (REEF) in British Columbia, now under construction, are to begin in 2027.

“This partnership will diversify BASF’s cracker feedstock portfolio and strengthen the link between Canada, as one of the world’s largest energy producing regions, and Asia, one of the fastest growing demand regions globally,” BASF said on July 23. “The agreement will provide shorter lead times and reliable shipping deliveries to Asia.”

BASF’s extensive presence in Asia includes a growing €10 billion integrated production complex at Zhanjiang, China, where a 1 million metric tons per year mixed feed steam cracker is slated to begin production in 2026.

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State Oil Fund of Azerbaijan (SOFAZ) revenue from the sales of profitable oil and gas from the Apsheron field came to $98.9 million in 2024, up 3.6-fold from $27.8 million in 2023, the Fund said in a report, as per Interfax.

Revenue from the sale of gas and condensate from this field amounted to $33.3 million and $65.6 million, respectively, in 2024.

In total, SOFAZ revenues from the sale of profitable oil and gas in Azerbaijan in 2024 amounted to $6.74 billion, down 21% compared to 2023. Most of it - 91.3% of all revenues -came from the sale of profitable oil and gas from the Azeri-Chirag-Gunashli (ACG) project - $6.16 billion. The Shah Deniz project provided $442.1 million, of which $309.6 million from gas sales and $132.5 million from condensate.

The SOFAZ budget for 2024 assumed an average sale price of $82.3/bbl oil, which is 1.3% less than in 2023.

BP plc paid bonuses to SOFAZ totaling $182.83 million in 2024, compared with $182.31 million in 2023. Payments from participation in the ACG project were level with 2023 at $182.25 million, and from Shah Deniz $0.98 million, compared with $0.06 million.

ACG project participants included MOL Azerbaijan Ltd. paid $57.41 million, Inpex Southwest Caspian Sea Ltd. - $55.84 million, Equinor - $43.61 million, Exxon Azerbaijan Limited - $40.75 million, TPAO - $34.38 million, Itochu Oil Exploration (Azerbaijan) Inc. - $21.89 million and ONGC Videsh Limited - $13.86 million.

Shah Deniz project participants NICO paid $0.19 million, TPAO - $0.38 million and Lukoil - $0.39 million.

TotalEnergies paid a bonus of $6.25 million in 2024 in connection with the development of the Absheron gas condensate field in the Caspian Sea.

In total, the fund's receipts in the form of bonuses reached $457.8 million in 2024, down from $471 million in 2023.

SOFAZ accumulates income from the implementation of oil and gas contracts, in particular from the sale of profitable oil and gas by the state, transit tariffs for the transportation of oil and gas across the country, and from the rental of state property and other income.
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The European Union is trying to make all member states of the Group of Seven (G7) to join its new mechanism of capping prices of Russian oil, this issue is being discussed with G7, but Brussels has not yet achieved its goal, European Commission spokesperson Olof Gill said, as per Interfax.

"As regards the new price cap mechanism, our intention is to discuss it with the G7 price cap coalition. We have already been in touch with them, of course, while we were preparing this with a view to aligning as best as possible in the future. Our aim is that other G7 members will eventually adopt such cap levels when a new adjustment made by the [European] Commission," Gill said at a press briefing in Brussels on Tuesday.

Answering follow-up questions, he pointed out that the unified position of the G7 regarding the price of Russian oil is important for the efficient use of this measure. At the same time, he admitted that the coordinated position has not been achieved yet.

"That is something we are trying to work towards in these discussions," he said. The United Kingdom has already joined the new oil price cap mechanism, and discussions with other G7 members are continuing, Gill said.

On July 18, the Council of the EU endorsed the 18th package of anti-Russian sanctions, including the Russian oil price cap reduced to $47.6 per barrel. On the same day, the UK announced joining the EU in lowering the price cap on Russian oil to $47.6 per barrel.

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Russian Energy Minister Sergei Tsivilev discussed oil and gas supplies to China with National Energy Administration (NEA) head Wang Hongzhi, as well as the development of gas transportation infrastructure during his two-day visit to the country, the Energy Ministry said in a statement, as per Interfax.

"Agreements were reached to promote a number of joint industry initiatives and deepen coordination in various international venues," it said.

In addition, the Russian minister held talks with the heads of Chinese oil and gas corporation CNPC and engineering corporation CEEC.

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