SIBUR presents Amur Gas Chemical Complex to the President Vladimir Putin

MOSCOW (MRC) -- Dmitry Konov, Chairman of the Management Board at SIBUR Holding presented the Amur Gas Chemical Complex (GCC) project to President Vladimir Putin at the Eastern Economic Forum, as per SIBUR's press release.

The Amur Gas Chemical Complex (GCC) project is set to build one of the world's largest gas chemical facilities in the Svobodnensky District of the Amur Region as part of the Svobodny Priority Development Area (PDA). Feedstock for the project will be sourced from the Amur Gas Processing Plant (GPP), which is currently being built by Gazprom to process wet gas from deposits in Siberia and the Republic of Yakutia and then supply it to China. The Amur GCC and GPP will be in close proximity to each other and technologically connected.

SIBUR may implement the project in a basic or extended configuration. The basis configuration provides for processing of 2 mtpa of ethane fraction to come from the Amur GPP. It will have a capacity of 1.5 mtpa of ethylene that could be further transformed into polyethylene grades enjoying both domestic and global demand. The project will create about 1,000 new high-tech jobs at the GCC and auxiliary facilities.

The extended configuration boasts a larger capacity of up to 2.7 mtpa of end products resulting from an additional 1.5 mtpa of liquefied petroleum gas (LPG) supplied by the Amur GPP. If the extended option comes to life, the Amur GCC will become the world's largest producer of polyethylene and polypropylene. The capacity expansion would create up to 300 additional jobs in the region, boosting overall fiscal revenues by RUB 4 bn.

As of now, a long-term agreement for the supply of feedstock (ethane fraction) has been signed with Gazprom and licence agreements and FEED contracts have been made with the engineering companies. As the GCC site is being prepared for construction, SIBUR is working on the project’s extended configuration and holding talks with Gazprom on LPG supplies. The Company is also expecting a potential decision by the government to introduce a negative excise tax on LPG that will create equal processing conditions for various petrochemical resources. The project configuration decision will be finalised by the end of 2019.

Dmitry Konov, Chairman of the Management Board at SIBUR Holding: “The Amur GCC project is certain to attract new technologies to the region boosting social infrastructure development, while also contributing to high-tech production and promoting Russia's non-commodity exports. SIBUR has extensive and successful experience completing major petrochemical projects on time and on budget. Currently, we are working on pre-commissioning at ZapSibNeftekhim, Russia's largest petrochemical facility".

The Amur GCC will be built using cutting-edge production and digital technologies and leveraging advanced solutions of the world's leading licensors to ensure the facility’s long-term seamless operation, its industrial and environmental safety and energy efficiency.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polyprolypele (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,255,800 tonnes in the first seven months of 2019, up by 9% year on year. Shipments of all PE grades increased. Meanwhile, the estimated PP consumption in the Russian market was 796,120 tonnes in January-July 2019, up by 11% year on year. Shipments of PP block copolymer and homopolymer PP increased.

SIBUR is the largest integrated petrochemicals company in Russia. The Group sells its petrochemical products on the Russian and international markets in two business segments: Olefins & Polyolefins (polypropylene, polyethylene, BOPP films, etc.) Plastics, Elastomers & Intermediates (synthetic rubbers, EPS, PET, etc.). SIBUR’s petrochemicals business utilises mainly own feedstock, which is produced by the Midstream segment using by-products purchased from oil and gas companies. More than 26,000 employees working in SIBUR contribute to the success of customers engaged in the chemical, fast moving consumer goods (FMCG), automotive, construction, energy and other industries in 80 countries worldwide. In 2018, SIBUR reported revenue of USD 9.1 billion and adjusted EBITDA of USD 3.3 billion.
MRC

MOSCOW (MRC) -- Ukraine's overall production of high density polyethylene (HDPE) fell in the first seven months of 2019 by 12% year on year, totalling 50,800 tonnes, according to ICIS-MRC Price report.

July HDPE output rose in Ukraine by 9.3% from the previous month to 9,400 tonnes. This figure was at around 8,600 tonnes in June.

Meanwhile, in August, Karpatneftekhim reduced its capacity utilisation by 20% from July, the same level of utilisation is also planned for September.

As reported earlier, Karpatneftekhim announced a reduction of USD48/tonne from August in its HDPE prices for September shipments to the domestic market.
MRC

MOSCOW (MRC) -- The September contract price of propylene was settled in Europe down by EUR50/tonne from the previous month. Therefore, all European producers announced a reduction in export polypropylene (PP) prices for September shipments to the CIS markets, according to ICIS-MRC Price report.

Negotiations over September prices of European PP have begun at the beginning of this week. All market participants said European producers reduced their export prices of propylene polymers for this month's shipments, but in some cases, the price decrease was less than the cut in prices of European propylene.

Deals for September shipments of propylene homopolymers (homopolymer PP) were discussed in the range of EUR1,005-1,055/tonne FCA, down by EUR30-50/tonne from August. Deals for block copolymers of propylene (PP block copolymers) were negotiated in the range of EUR1,090-1,130/tonne FCA, also down by an average of EUR30-50/tonne from the previous month.

Some European producers had restrictions for export shipments, but they were not critical for most buyers. Consumers partially met their needs for PP due to deliveries from the Middle East.
MRC

MOSCOW (MRC) - Plant of New Polymers 'Senege", one of the Russian producers of PET chips, plans to stop production of polyethylene terephthalate (PET) for scheduled repairs in October, according to the ICIS-MRC Price Report.

According to a source in the company, the shutdown will take about a month. The exact dates of the beginning and completion of the repair were not reported.

Spot prices of PET from the producer in August were at the level of Rb94,000/tonne CPT Moscow, including VAT.
Last week, the producer left prices unchanged.

Senege (part of the Europlast group) is one of four Russian food PET plants. The total capacity of the plant is 100,000 tonnes/year.
MRC

MOSCOW (MRC) -- Novak told reporters that the energy ministry was discussing the aftermath of a major oil contamination with oil giant Rosneft and pipeline monopoly, reported Reuters.

Russian oil output this month will be lower than it was in August, Energy Minister Alexander Novak said on Wednesday.

Speaking at an economic forum in Russia's Far East, Novak also told reporters that the energy ministry was discussing the aftermath of a major oil contamination with oil giant Rosneft and pipeline monopoly Transneft.

As MRC informed earlier, in May 2019, a government official said that Russia’s state pipeline monopoly Transneft will compensate all parties for losses incurred from contaminated oil, but they must prove the damage, as the first European refinery declared force majeure.
MRC