Sibur and Sinopec Link on Amur JV

07.06.2019 -

Russian petrochemicals and plastics giant Sibur has signed several agreements with Chinese state-owned conglomerate Sinopec.

One deal relates to Sinopec’s potential participation in Sibur’s previously announced Amur Gas Chemicals Complex (AGCC) in Russia’s Far East. Sinopec, which bought a 10% stake in Sibur in December 2015, is expected to take a 40% share in the joint venture, subject to a final investment decision in the project, expected in 2020.

“The partnership will allow the parties to tap into shared expertise and experience to maximize efficiency of new large-scale projects and to exchange best practices,” said Dmitry Konov, chairman of Sibur Holding’s management board.

In May 2018, Sibur finalized a supply agreement with Gazprom for 2 million t/y of ethane feedstock for the Amur complex. Gazprom is building a six-train gas processing plant at Amur, which it said will be the largest in Russia and one of the biggest in the world.

The AGCC will be centered on an ethane cracker with an ethylene capacity of 1.5 million t/y, feeding three PE units: two swing HDPE/LLDPE plants of 500,000 t/y each and one 500,000 t/y HDPE plant. Output from the plants is targeted at markets in China and Southeast Asia, where Sibur said demand is growing rapidly.

According to information posted by Sibur on its website  in June 2018, the complex will be ready for pre-commissioning and commissioning in time for the construction of the fourth production line of Gazprom’s gas processing complex, or no sooner than 2024.

The two companies also signed a number of agreements relating to the production and sale of petrochemicals. One is related to deliveries of PE from Sibur subsidiary ZapSibNeftekhim’s project at Tobolsk. The complex, which is due for completion in the second quarter of 2019, will produce 1.5 million t/y of ethylene, 1.5 million t/y of PE and 500,000 t/y of PP.

“Sibur and Sinopec have agreed to join forces to process natural gas into petrochemicals in Russia and China, and to engage in R&D and personnel training cooperation to facilitate sharing of knowledge and expertise,” the Moscow-headquartered group said.

In another Sino-Russian deal, Sibur and the Silk Road Fund, a Chinese state-owned investment body, signed a contract to enhance their cooperation to develop relations between northeast China and Russia’s Far East, sharing information about market opportunities in central Asia, the Middle East and other regions along with coordinating efforts for potential joint investments in petrochemical projects.

“The agreement testifies to the strong investment appeal of petrochemicals as an industry that creates cutting-edge and green materials for construction, healthcare, car making, food and other areas. Enhanced cooperation with the Silk Road Fund will help to grow economic ties between Russia and China,” Konov said.