The damage from gas restrictions on petrochemicals in winter can significantly impact the production and operational costs of these units. Samaneh Ghaibi, an expert in the petrochemical industry, emphasized the importance of accurately calculating the damage caused by production decline and stated that for this purpose, the actual amount of lost production and additional costs must be calculated.
The economic dimensions of gas restrictions
Ghaibi pointed out that the first step in calculating the damage is to examine the extent of feedstock reduction and its impact on the production of each complex, adding that natural gas is used as the main feedstock in methanol units, and in urea complexes, gas restrictions can also affect the production of ammonia, the raw material for urea production.
According to the provided example, a methanol complex with an annual nominal capacity of one million tons, if its production is halved for 15 days, will have about 20,500 tons of lost production. Assuming the selling price of each ton of methanol is 250 dollars, the potential sales value of the unproduced product reaches about 5 million and 100 thousand dollars. However, this figure cannot equate to the actual loss of the company.
Factors affecting damage calculation
Ghaibi noted that the reduction in the participation margin due to lost production, assuming a price difference between sales and variable production costs of each ton is hypothetically 50 dollars, could lead to a loss of about one million dollars. Additional costs such as downtime, restart, and contractual obligations should also be calculated separately.
In urea complexes, gas restrictions can initially affect ammonia production and then the urea production process. The extent of production decline depends on the operational conditions of the ammonia unit, urea production capacity, and the ability to manage and allocate feedstock.
Ghaibi also emphasized that using a fixed coefficient to calculate damage for all petrochemical complexes cannot provide an accurate picture of the economic consequences of gas restrictions. This is due to differences in technology, operational conditions, and cost structures that can lead to varying losses for the complexes.
Moreover, additional costs arising from production stoppages may extend beyond the duration of gas restrictions. According to Ghaibi, the duration of gas restrictions is not necessarily equal to the duration of production decline, and it may take longer for equipment to return to stable conditions.
Given the current conditions, precise planning during the cold season can help mitigate damages. Ghaibi emphasized that early announcement of restrictions gives petrochemical complexes the opportunity to carry out repairs and manage inventory effectively, preventing sudden costs.
Finally, Ghaibi highlighted four main indicators for calculating the damage from gas restrictions on petrochemicals, which include a combination of information related to lost production, participation margin, and additional operational and contractual costs. This method helps distinguish actual losses from the potential sales value of the unproduced product.
