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Severstal increases stake in joint venture with Linde GmbH

July 13/2020

MOSCOW (MRC) -- PAO Severstal announces it has closed a deal to increase its shareholding in its joint venture with Germany's Linde GmbH for the production of coil-wound heat exchangers (CWHE) for use in medium-scale and large-scale LNG plants. Following the completion of the transaction, Severstal will have a 50% stake in the joint venture, said the company.

The joint venture was established in June 2017 under a scheme to localise production of CWHE in Russia. In 2019, as previously announced, Severstal signed an agreement to purchase a 26% stake in the joint venture with Linde.

Increasing its stake reflects one of the key priorities of Severstal's updated strategy guaranteeing superior customer experience by providing high-tech customized solutions to the energy industry.

Alexander Shevelev, CEO of Severstal, commented: "Increasing our share in the joint venture was a logical step towards increasing our presence in the dynamically developing market of LNG production, storage and transportation. Heat exchangers are not assembled on a production line, but are exclusively made to order. The key advantage of this is the ability to develop unique engineering solutions for specific projects. This allows us to consider all the nuances of technological processes at a customer's plant and, as a result, maintain close contact with our partners at each stage of the project implementation. At the moment, the JVs order capacity is approaching 100%, and there is potential to build additional capacity. In October 2019, the joint venture received its first export order, which is due for delivery in 2020."

As MRC informed earlier, Linde has announced that it has started up a state-of-the-art hydrogen and carbon monoxide facility in Clear Lake, Texas (TX), as well as a new air separation unit in LaPorte, TX. The plants will supply oxygen, nitrogen and carbon monoxide to Celanese, under a previously announced long-term agreement, and hydrogen to other customers via Lindes US Gulf Coast pipeline system.

Besides, Linde PLC has recieved a contract to provide technology for PJSC Sibur Holdings cracker at Amur gas chemical complex (GCC). GCC is an integrated 1.5 million tons per year polyethylene and polypropylene production complex to be built near Svobodny in Russias far-east Amur region. The contract was awarded to Linde under a consortium with Sibur subsidiary and project contractor NIPIgazpererabotka (Nipigaz).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 721,290 tonnes in the first four month of 2020, up by 4% year on year. Low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) shipments grew partially because of the increased capacity utilisation at ZapSibNeftekhim.
Author:Anna Larionova
Category:General News
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