SIBUR proceeds with ZapSibNeftekhim project

MOSCOW (MRC) -- SIBUR , Russia’s largest petrochemical company, said today that following the completion of the front-end engineering design (FEED) contracts and assessment of the design documentation, it is proceeding with the previously announced mega ZapSibNeftekhim project at Tobolsk, Russia, said the producer in its press release.

ZapSibNeftekhim's project is designed to operate a steam cracker (by Linde AG, Germany) with a capacity of 1.5 mtpa of ethylene, around 500 ktpa of propylene and 100 ktpa of butane-butylene fraction (BBF), along with units with a total capacity to produce 1.5 mtpa of various grades of polyethylene (by INEOS, UK) and a polypropylene unit of 500 ktpa (by LyondellBasell, Netherlands).

The cracker, polyethylene and polypropylene units’ FEED has been completed. SIBUR has signed an agreement to design infrastructure and off-site facilities with NIPIgazpererabotka, Russia's leading engineering centre in the gas processing industry.

According to preliminary estimates, the total investment in ZapSibNeftekhim will amount to approximately USD9.5 billion, including the expenditure already incurred and costs budgeted for commissioning. Construction of the project is expected to be completed within five to five and a half years.

"SIBUR has a strong financial position. Over recent years, the company has delivered on ambitious projects to expand its gas processing and fractionation capacity, improve transport infrastructure reliability, and build its first large polymer production capacities, providing the basis for a smooth transition into the next stage of the project,” said Dmitry Konov, CEO.

SIBUR's projects in the Tyumen region are part of the investment agreement with the Tobolsk regional government and the Tobolsk city administration aimed at a comprehensive development of the Tobolsk production site. This agreement covered, among other projects, the construction of the Tobolsk-Polymer PP production facility, commissioned in 2013; expansion of a gas fractionation plant; and railway infrastructure development, commissioned in 2014; along with the construction of the main pipeline between Purovsky gas condensate processing plant and Tobolsk-Neftekhim. The parties provide support for the project under applicable law and the current agreement to ensure a comprehensive development of the Tobolsk production site. It has now been agreed to extend the current investment agreements for 10 years – until 2024.

The use of cutting-edge processes will ensure safety and reliability of production. Prior to the implementation of the project, SIBUR commissioned a Russian team from Environmental Resources Management, a global leader in HSE advisory services, to estimate ZapSibNeftekhim's environmental footprint. Comprehensive analysis showed that the prospective operations comply with the applicable Russian laws and environmental requirements. ZapSibNeftekhim's construction and operations will neither exceed environmental standards nor have a material adverse effect on the environment.

The facility will create new jobs, provide more tax and other payments to the budget, and contribute to the social development and quality of life in Tobolsk, SIBUR says.
MRC

MOSCOW (MRC) - Imports of suspension polyvinyl chloride (SPVC) in Ukraine decreased by 15% in the first eight months of this year, with the main decrease occurred for the delivers from Europe, according to MRC DataScope.

Following the surge in PVC imports in July (18.600 tonnes) Ukraine's imports expectedly decreased to 10,700 tonnes in August. Carryovers left from the July deliveries, as well as the going to an end of the high season were the main reasons for the fall of resin imports. Total SPVC imports in the country decreased to 76,800 tonnes in January - August 2014, compared with 90,600 tonnes year on year.

Structure of SPVC imports in Ukraine for the period under review was as follows. August imports of US SPVC reduced to 7,200 tonnes following the record highs in July of 12,900 tonnes. Total imports of US SPVC in Ukraine grew to 45,700 tonnes in the first eight months of this year, compared with 44,300 tonnes year on year. The relatively low export prices in the North America and the ease conditions of exports were the main reasons for the increase in the supply.

August imports of European SPVC in the country declined to 3,400 tonnes, compared with 5,600 tonnes in July because of the scheduled maintenance works at some plants. Total imports of European SPVC in Ukraine were 29,600 tonnes in the first eight months of 2014, compared with 43,100 tonnes in the same time year earlier.

Key suppliers of the suspension PVC in the Ukrainian market because of to geographical nearness were producers from Hungary, Poland and Germany. SPVC imports from other regions (Asia, Turkey, Russia) were rare.

MRC

MOSCOW (MRC) -- SIBUR has announced that overall sales increased by 32.1% to RUB 171,712m (EUR3.4bn) for the first half of 2014 from RUB 130,030m (EUR2.6bn) in the first half of 2013, said the producer in its press release.

The company states that its sales of basic polymers increased by 58.2% year-on-year to RUB 16,695m (EUR334m) from RUB 10,555m (EUR211m) in the first half of 2013 following the launch of its Tobolsk-Polymer Plant.

Its EBITDA for the period increased by 29.8% year-on-year to RUB 49,486m (EUR991m) from RUB 38,117m (EUR764m) in the first half of 2013.

SIBUR also announced that it is proceeding with the ZapSibNeftekhim project, which is designed to enable the company to operate a steam cracker, with a capacity of 1.5 mtpa of ethylene, along with units with a total capacity to produce 1.5 mtpa of various grades of polyethylene and a polypropylene unit of 500 ktpa. The project sees a total investment of around USD9.5bn (EUR7.3bn).

The cracker, polyethylene and polypropylene units’ feed has been completed. Sibur says that it has signed an agreement to design infrastructure and off-site facilities with NIPIgazpererabotka, Russia's leading engineering centre in the gas processing industry.

Dmitry Konov, CEO of Sibur, said: "SIBUR has a strong financial position. Over recent years, the company has delivered on ambitious projects to expand its gas processing and fractionation capacity, improve transport infrastructure reliability, and build its first large polymer production capacities, providing the basis for a smooth transition into the next stage of the project."

SIBUR says that construction and other works for the project are to be completed within five to five and a half years.

SIBUR is a uniquely positioned vertically integrated gas processing and petrochemicals company. SIBUR owns and operates Russia’s largest gas processing business in terms of associated petroleum gas processing volumes, and is a leader in the Russian petrochemicals industry.

As of 30 June 2014, SIBUR operated 26 production sites located all over Russia, had over 1,400 major customers engaged in the energy, automotive, construction, fast moving consumer goods (FMCG), chemical and other industries in approximately 70 countries worldwide and employed over 26,000 personnel.
MRC

MOSCOW (MRC) -- Imports of polycarbonate (PC) from Europe to Russia dropped from January to August 2014 by 4% year on year and ]totalled 17,800 tonnes, according to MRC DataScope report.
Grades for sheet extrusion accounts for more than 70% of the total imports of PC granules. Extrusion segment is the most developed and promising in the Russian market. About 95% of all delivered quantities are imported from Europe. These are shuch companies, as Sabic Innovative Plastics and Bayer with the shares of 83% and 11%, respectively. The bulk of extrusion grade PC production facilities of Sabic Innovative Plastics is located in the Netherlands and Spain, and those of Bayer - in Belgium.
Kazanorgsintez, the only national PC producer, accouts for an average of 60% in the total consumption of extrusion grade PC. Since recently, Kazanorgsintez has decided to expand its share in the domestic market, particularly, in its extrusion segment. Consumers reacted positively to this because of a perceptible rise in domestic prices of imported material on the back of the rouble devaluation.

MRC

MOSCOW (MRC) -- Specialty chemicals group Lanxess is strengthening its production network in China to meet the high level of demand for iron oxide pigments and is adding a mixing and milling plant to the pigment plant already under construction in Ningbo, as per the company's press release.

Potential customers for the iron oxide pigments are the coatings, plastics, construction and paper industries. This brings the total investment at the Ningbo site from around EUR 55 million to around EUR 60 million.

The new plant for iron oxide red pigments in Ningbo, which has been built to the latest environmental standards, is being designed for an initial annual synthesis capacity of 25,000 metric tons. On the same site, Lanxess is building the mixing and milling plant for pigments with an annual capacity of 70,000 metric tons. This plant will also process raw pigments from other Lanxess sites for the Asian market. The plants are scheduled to be completed in the fourth quarter of 2015 and to start production in the first quarter of 2016.

At the same time, Lanxess will also close its existing mixing and milling operations in Taopu, Shanghai, with an annual capacity of 35,000 metric tons by the end of 2016. Shanghai City Council will be integrating the vacated plant grounds into a high-tech park in Shanghai’s Putuo District.

"The trend towards urbanization is continuing unabated. Our decision to significantly expand our plant in Ningbo is based on the fact that the global demand for iron oxide pigments is growing at an annual rate of around three percent," says Jorg Hellwig, head of the Inorganic Pigments business unit (IPG) at Lanxess. "In addition to our Jinshan/Shanghai site in China, we will then have another very strong base for our global production network. By doubling our milling capacities in China, we are strengthening our position as a world-leading manufacturer of iron oxide pigments with a wide-ranging product portfolio for customers."

Lanxess already operates a synthesis plant in Jinshan, Shanghai, considered to be one of the largest, most modern facilities for iron oxide pigments in China. The plant has an annual production capacity of 38,000 metric tons of high-quality iron oxide yellow and iron oxide black pigments.

With an annual capacity of over 350,000 metric tons, Lanxess’ Inorganic Pigments business unit (IPG) is one of the world’s leading manufacturers of inorganic iron oxide and chrome oxide pigments. The center of global production operations is Krefeld-Uerdingen in Germany. This business unit has some 1,250 employees and is part of the Performance Chemicals segment.

As MRC informed before, last July, Lanxess celebrated the opening of its first production facility in Russia. In the new plant at the Lipetsk site, Lanxess subsidiary Rhein Chemie manufactures polymer-bound rubber additives for the markets in Russia and the Commonwealth of Independent States (CIS), primarily for the automotive and tire industries. A production facility for the bladders used in tire production is to be added in 2016. The overall investment volume in euros amounts to a seven-digit figure and 40 new jobs will be created at the new plant in the medium term.

Lanxess is a leading specialty chemicals company with sales of EUR 8.3 billion in 2013 and roughly 17,300 employees in 31 countries. The company is currently represented at 52 production sites worldwide. The core business of Lanxess is the development, manufacturing and marketing of plastics, rubber, intermediates and specialty chemicals.
MRC