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Russian SIBUR examining capital market options

August 08/2018

MOSCOW (MRC) -- Russian petrochemicals producer SIBUR is examining various options on capital markets, its chief executive told Reuters while declining to confirm concrete plans for an initial public offering (IPO).

Financial market sources told Reuters last month SIBUR was preparing an IPO that could raise USD2-USD3 billion and potentially take place by the end of the year.

"We are considering the different options on the capital markets as and when necessary. Now its to early to say about the concrete plans," Dmitry Konov said in an interview, without detailing the options.

Businessman Leonid Mikhelson, the head of and a major shareholder in Russias largest gas producer Novatek, owns 48.5 percent of Sibur, which is the largest petrochemical producer in Eastern Europe.

Mikhelsons business partner Gennady Timchenko owns 17 percent, while Chinas Sinopec and Silk Fund control 10 percent each.

A source familiar with the matter told Reuters last month that Mikhelson might sell part of his stake, while Timchenko and another shareholder, Kirill Shamalov, both subjected to U.S. sanctions, were likely to retain their shares.

Shamalov owns 3.9 percent in Sibur.

Given most of Siburs revenue is made in U.S. dollars, Konov said the largest part of the firms debt should also be denominated in the currency.

He said capital spending was peaking in 2018 as construction works at a petrochemical complex in western Siberia, known as ZapSibNefteKhim, were expected to be completed in May 2019.

The installation and start-up works need to be done before ZapSibNefteKhim, which will be one of the worlds five biggest petrochemical plants, is due to come on stream, he added.

SIBUR is considering building a second big plant, known as the Amur Gas Chemical Complex (GCC), and may make a final decision at the end of 2019, Konov said.

According to the companys website, Amur GCC will have a capacity of 1.5 million tonnes per year of ethylene, to be further transformed into polymer products.

SIBUR said last month investment in this plant could total up to USD8 billion and it was looking to share the cost with partners from Asia.

As MRC wrote before, on 17 February 2015, SIBUR launched construction of ZapSibNeftekhim,a facility for deep hydrocarbon to polyolefin processing. 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).
Author:Margaret Volkova
Tags:PP, PE, propylene, ethylene, gas processing, petrochemistry, Sibur Holding, ZapSibNeftehim, Russia.
Category:General News
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