2017 Iran Petrochemical Report – Outlook on Projects in Development & 2017 Annual Report on Coal-to-Ethanol in China

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Regarding the “2017 Iran Petrochemical Report – Outlook on Projects in Development”, Iran is an important country in the Middle East and one of the members of the Organization of Petroleum Exporting Countries (OPEC). It has a land area of approximately 1.65 million square kilometers and a population of around 80 million. Iran possesses abundant oil and gas resources; by the end of 2016, its proven oil reserves amounted to 157.2 billion barrels, while its proven gas reserves were 33.7 trillion cubic meters. Iran is the second-largest crude oil exporter within the Organization of Petroleum Exporting Countries (OPEC), and its oil production capacity ranks fourth in the world. Iran was **one of the first countries in the Middle East to develop its petrochemical industry**, but due to events such as the Islamic Revolution, the Iran-Iraq War, and international sanctions, the development of its petrochemical sector has faced many challenges. After the Islamic Revolution, Iran’s oil and gas industry was fully nationalized. The National Petrochemical Company of Iran (NPC) is responsible for the development and operation of Iran’s petrochemical industry; it operates 59 petrochemical enterprises that are engaged in the production, sales, and distribution of petrochemical and chemical products. The petrochemical industry is an important industrial sector in Iran and a significant source of non-oil revenue. In 2016, the total production capacity of Iran’s petrochemical industry exceeded 60 million tons per year, with output reaching over 59 million tons. Iran’s main advantages in the petrochemical industry include diverse raw materials, access to international waters, and a highly skilled labor force. The main raw materials for Iran’s petrochemical industry are naphtha, natural gas, and ethane. The Iranian petrochemical industry produces over 70 types of products, mainly in the area of commodity chemicals, including olefins, methanol, polyolefins, urea, and synthetic ammonia. Currently, Iran has an installed ethylene production capacity of nearly 7 million tons, a propylene production capacity of nearly 1 million tons, a methanol production capacity of nearly 5 million tons, a polyolefin production capacity of nearly 6 million tons, and an ethylene glycol production capacity of nearly 1 million tons. The production capacities for synthetic ammonia and urea each exceed 3 million tons. Iran has launched or is in various stages of implementation for over 58 petrochemical projects, including an ethylene production capacity of nearly 6 million tons, a propylene production capacity of nearly 2 million tons, a methanol production capacity of over 20 million tons, an ethylene glycol production capacity of nearly 3 million tons, an ammonia production capacity of nearly 8 million tons, and a urea production capacity of nearly 10 million tons. Once completed, these projects will raise Iran’s petrochemical production capacity to 120 million tons per year. At the beginning of 2016, following the conclusion of the Iran nuclear deal, countries such as the European Union and the United States announced the lifting of the sanctions that had been in place against Iran for many years. Iran was set to re-enter the global petrochemical market and play an important role there, with its petrochemical projects expected to progress more rapidly. Global petrochemical investors, engineering service providers, and equipment suppliers will focus on the Iranian market. Yahua Consulting’s experienced research team traveled to Iran to conduct on-site investigations in collaboration with local Iranian companies, and by combining information from authoritative agencies responsible for monitoring the development of Iran’s industry, they have released the \"2017 Iran Petrochemical Report – Outlook on Projects Under Construction.\" The content covers the following areas: 1. The current status of petrochemical economic zones and petrochemical enterprises in Iran. 2. The current status of ports, terminals, and storage areas supporting these petrochemical economic zones in Iran. 3. A statistics and overview of olefin projects under construction in Iran. 4. A statistics and overview of methanol projects under construction in Iran. 5. A statistics and overview of ammonia/urea production projects under construction in Iran. 6. A statistics and overview of other petrochemical projects under construction in Iran. 7. Maps showing the locations of Iran’s major oil, gas, and chemical industrial parks. Regarding the “2017 Annual Report on Coal-to-Ethanol Production in China”, ethanol, commonly known as alcohol, is a flammable and volatile colorless liquid at normal temperature and pressure; it is also soluble in water. Industrial ethanol can be used in printing, electronics, hardware, fragrances, chemical synthesis, pharmaceutical synthesis, and other fields, as well as as a cleaning agent and solvent. Fuel ethanol refers to an anhydrous ethanol that has been treated with a denaturant to prevent it from being used directly, and can be mixed into gasoline as a fuel for internal combustion engines in vehicles. Currently, the ethanol gasoline (E10) sold in China is gasoline blended with 10% (by volume) of modified fuel ethanol. Constrained by raw material supply and production costs, ethanol production using grains as raw materials is unable to meet the growing demand for industrial ethanol and fuel ethanol. New non-grain ethanol production technologies, including the hydrogenation of acetic acid (acetates) to produce ethanol, the production of ethanol from syngas, and the production of ethanol from cellulose, will challenge traditional grain-based ethanol production and bring about changes in the ethanol industry. To address the issue of aged grain, during the 10th Five-Year Plan period, **four pilot fuel ethanol enterprises were approved, including Jilin Fuel Ethanol Co., Ltd., Henan Tianguan Enterprise Group Co., Ltd., Anhui Fengyuan Biochemistry Co., Ltd. (now COFCO Biochemistry (Anhui) Co., Ltd.), and Heilongjiang China Resources Ethanol Co., Ltd. (now COFCO Biochemical Energy (Zhaodong) Co., Ltd.). Their combined production capacity was 1.02 million tons per year. With the successive commissioning and capacity expansion of ethanol production lines by various enterprises, there are currently 7 fuel ethanol producers in China, with a total annual production capacity of 2.52 million tons. China began promoting the use of ethanol-blended gasoline in 2001. By September 2017, the use of such gasoline in vehicles had been introduced in 12 provinces, including six provinces and autonomous regions namely Jilin, Liaoning, Heilongjiang, Henan, Anhui, and Guangxi, as well as 9 cities in Hubei Province, 8 cities in Shandong Province, 6 cities in Hebei Province, 5 cities in Jiangsu Province, 3 leagues and cities in Inner Mongolia, and Zhanjiang in Guangdong Province. The current national V ethanol gasoline grades in use in China are 92#, 95#, and 98#. On September 13, 2017, the official website of the **Energy Bureau announced that, with the approval of the State Council, fifteen ministries and commissions including the **Development and Reform Commission, the **Energy Bureau, and the Ministry of Finance had issued the \"Implementation Plan for Expanding the Production of Biofuel Ethanol and Promoting the Use of Ethanol Gasoline in Vehicles\". By 2020, ethanol-blended gasoline for vehicles will be promoted nationwide. A 50,000-ton capacity facility for cellulose fuel ethanol has entered demonstration operation. By 2025, efforts will be made to achieve large-scale production of cellulose fuel ethanol, with advanced bio-liquid fuel technologies, equipment, and the entire industry reaching international leadership levels, as well as a more sophisticated market-based operation mechanism being established. China’s huge potential demand for fuel ethanol, coupled with the limited supply capacity of fuel ethanol, creates significant market opportunities for ethanol produced from coal. According to Yahuazheng Consulting’s research, for coal-based ethanol to achieve large-scale commercial development, the following issues must be resolved: whether it is possible to carry out continuous and stable production on a commercial scale ； Can the cost be competitive enough ； Is it possible to overcome policy and market barriers in order to gain access to existing sales channels? ； How to win competition against other alternative fuels, such as methanol gasoline.