MOSCOW (MRC) -- SIBUR Holding and NORCHEM LLC signed a long-term agreement for the supply of ethylene oxide to the NORCHEM Dzerzhinsk production site - Zavod sintanolov LLC, said the company.
The agreement provides for the supply of up to 150 thousand tons of ethylene oxide in the period of 2020-2024. In 2019 Zavod sintanolov LLC completed the first stage of a large-scale reconstruction of hydroxyethylation and oxypropylation capacities, which resulted in an increase in the production of alkoxylated products by 30%. It will also significantly expand the Company's assortment, including through innovative products.
Previously Zavod sintanolov LLC signed an agreement with LLC Gazprom neftekhim Salavat for the annual supply of at least 15 thousand tons of ethylene for its subsequent processing into ethylene oxide and glycol by 2027.
Thus, taking into account the diversification of the sources of supply of the main raw materials, as well as the new signed Agreement with SIBUR Holding, NORCHEM ™ will be able to process up to 70 thousand tons of Ethylene Oxide / Propylene Oxide per year by 2024. It will be possible to efficiently load the reconstructed production NORCHEM ™ facilities, to satisfy the growing needs of the Russian market for targeted petrochemical products and ensure export sales.
As MRC informed earlier, SIBUR Holdinghas shut its polyethylene (PE) plants for a planned maintenance since 23 May 2020. Based in Russia, the turnaround includes both old and new PE plants of SIBUR which consists of Tomskneftekhim with 270,000 tons/year of low density polyethylene (LDPE) unit, as well as ZapSibNeftekhim with a 700,000 tons/year high density polyethylene (HDPE) unit and 800,000 tons/year linear low density polyethylene (LLDPE)/HDPE swing plant. All PE plants are expected to remain off-stream for about 20 days.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 557,060 tonnes in the first three month of 2020, up by 7% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments rose because of the increased capacity utilisation at ZapSibNeftekhim. Demand for LDPE subsided. At the same time, PP shipments to the Russian market was 267,630 tonnes in January-March 2020, down 20% year on year. Homopolymer PP and PP block copolymers accounted for the main decrease in imports.
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