SIBUR breaks ground on Amur GCC project

MOSCOW (MRC) -- A construction site in the Amur Region saw the sinking of the first test pile in the foundation of Amur Gas Chemical Complex, a facility set to become one of the world’s largest and most advanced basic polymer producers, said the company.

The official ceremony was held online and was attended via video conference by Mikhail Mishustin, Prime Minister of the Russian Federation, relevant Ministers, Vasily Orlov, Governor of the Amur Region, Dmitry Konov, Chairman of the Management Board at SIBUR Holding, and other representatives of government authorities, the Company and its partners.

The Amur GCC project envisages construction of a basic polymer production facility with a total capacity of 2.7 mtpa (2.3 mtpa of polyethylene and 400 ktpa of polypropylene). The facility will feature a unique and the world's largest cracking unit for the first-stage processing of incoming feedstock.

Amur GCC will be launched in synch with the gradual ramp-up of Gazprom's Amur Gas Processing Plant to its full capacity, so that the latter could supply ethane and LPG to Amur GCC for processing into high value-added products. The completion of construction and commissioning is scheduled for 2024–2025. Once in operation, Amur GCC will give a major boost to the growth of non-commodity exports, as Amur GCC’s polymer production capacity is 1.35 times higher than total polymer exports in 2019.

China's Sinopec, the world’s largest petrochemical company, is expected to become SIBUR’s partner under this project. As a national leader of the oil and gas processing industry, Sinopec boasts an extensive distribution network in China for oil and gas products of varying processing levels. This country remains the key driver behind global polymer consumption growth and is a target market for Amur GCC.

Most on-site preparations at AMUR GCC have been accomplished. Contracts for detail design and equipment and materials supplies for the facility’s key process units have been signed and are being fulfilled. SIBUR’s technology partners are Linde and NIPIgaspererabotka (cracking units), Univation Technologies and Chevron Phillips (ethylene polymerisation) and LyondellBasell (propylene polymerisation). NIPIgaspererabotka will be responsible for project management, procurement and construction of off-site facilities. Where unique foreign licensed equipment is not required, the project will source up to 80% of supplies locally – the highest reliance on local procurement among major gas chemical projects in Russia. Moreover, supplies such as metal structures, construction materials, laboratory and remote control equipment are all intended to come exclusively from local manufacturers.

“This is one of the largest investment projects in Russia that brings strategic benefits to the gas industry and the country at large. In a very short span of time, Russia's Amur Region will see the opening of a giant factory with most advanced production techniques based on modern IT and telecommunications technologies. Launching these technologies is an investment in the future. We are forging new growth paths for the Amur Region, giving an impetus to the local economy. I am confident that the project will create thousands of high-tech jobs and drive the development of the transport and social infrastructure in the region. This will not only boost the economy, but will make the life of people in this beautiful place more comfortable. Building a gas chemical complex will unleash new opportunities for the region and coupled with the opening of a gas processing plant will surely create a multiplier effect for the economy,” said Mikhail Mishustin.

"Amur GCC that we are laying the foundation for today is a world-class project of high strategic importance to our region. It will create a multiplier effect, improving the image of the region, attracting investment, contributing to the region's GDP and generating tax revenues for budgets of all levels, as well as facilitating the development of related and associated industries and social infrastructure. As a highly resource-intensive project this facility will increase the number of jobs at both construction and post-commissioning stages. With a new gas chemical cluster in place, students and graduates will have a wider choice of careers to pursue. This will help us curb talent outflow and offer the youth new digital professions and opportunities for well-paid interesting jobs in the Russian Far East,” said Vasily Orlov.

"Amur GCC is another step forward towards transforming SIBUR into a global-level petrochemical company. The complex will be a key project in SIBUR’s investment programme for the next five years and upon commissioning will almost double our basic polymer production capacities, even taking into account ZapSibNeftekhim that is currently ramping up to the full-scale output level. Long-term forecasts for petrochemicals demand, proximity to the sales markets and a well thought out feedstock base give us confidence that Amur GCC will be a highly effective and competitive business that will help SIBUR gain a strong foothold in both Russia and globally," said Dmitry Konov.

In addition to Amur GCC, the nation's largest gas processing and gas-chemical cluster will be created in the Russian Far East to boost the region's development. What makes the project even more important is the fact it is a stepping stone to unlocking the country’s huge non-commodity export potential. Deep conversion of ethane, a key feedstock for Amur GCC, quadruples the added value of the resulting product. By 2040, this project is expected to increase non-commodity exports by RUB 4.6 tn. The significant role of the project is acknowledged by the agreement to make Amur GCC a resident of the Svobodny Priority Development Area that was signed by Alexei Vereshchagin, CEO of Amur GCC LLC, and Dmitry Tetenkin, Director General of the Far East Development Corporation JSC.

Amur GCC will be the world’s first petrochemical complex to implement a remote control room. The project will benefit from over 150 digital and automated solutions and 24/7 remote monitoring and control of most process operations. Amur GCC is set to become an example of the most advanced solutions in engineering data management, with all technical documents, engineering data and the 3D model being aligned and available in just one click. The project data will be accumulated and made accessible both at the construction stage and during operation for future refurbishments, modernisations, repairs and maintenance.

In line with SIBUR's Sustainability Strategy, Amur GCC will employ state-of-the-art processes such as smokeless flaring and using renewable energy sources where possible, both of which are now emerging as new trends gaining traction in the global petrochemical industry while the world seeks to reduce carbon footprint.

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

SIBUR is the leader of the Russian petrochemical industry and one of the largest companies globally in this sector, with more than 23,000 employees. The Company’s unique vertically integrated business model allows it to create highly competitive products consumed in the chemical, fast moving consumer goods (FMCG), automotive, construction, energy and other industries in 80 countries worldwide.

SIBUR helps to reduce CO2 emissions stemming from the burning of oil extraction by-products, such as associated petroleum gas (APG), by recycling them instead. In 2020, SIBUR processed 22.6 billion cubic metres of APG, thus cutting greenhouse emissions by 72 million tonnes, which is equivalent to the annual CO2 footprint of a middle-sized European country. In 2020, SIBUR reported revenue of USD 8.2 billion and EBITDA of USD 2.6 billion. Over the past 10 years, SIBUR has implemented a number of large-scale investment projects worth more than RUB 1 trillion.
MRC

MOSCOW (MRC) -- Braskem, the largest polyolefins producer in the Americas and leading producer of biopolymers in the world, announces its participation as a founding member and funding partner of the Polypropylene Recycling Coalition, a new initiative of The Recycling Partnership, said the company.

Braskem's collaboration within the Polypropylene Recycling Coalition will focus on increasing curbside recycling access for polypropylene (PP) to ensure this critical packaging material is widely recovered and reused in end-markets including food and beverage packaging, consumer products and automotive parts.

Geoffrey Inch, Braskem's North America Sustainability Director, states, "As the North American leader in polypropylene, Braskem is committed to strengthening the recycling and circularity of polypropylene. In addition to a financial commitment, Braskem is also bringing our technical expertise and market knowledge to drive necessary improvements in the U.S. recycling infrastructure for recovering polypropylene. Polypropylene is used in many vital applications that contribute to a sustainable and healthy life, and Braskem's collaboration with The Recycling Partnership is an essential step to ensuring PP recyclability for the clients and brand owners we serve."

In a announcement from The Recycling Partnership, Keefe Harrison, CEO, stated, "Together, we can stimulate a system-wide shift to increase the capture of polypropylene and demand of recycled content. We encourage all companies that utilize polypropylene to be part of the solution. The work of the Polypropylene Recycling Coalition to improve and increase the recovery of polypropylene will support jobs, preserve natural resources, and help build a circular economy in the United States."

The primary focus of the Polypropylene Recycling Coalition will be to achieve the same high levels of recycling for polypropylene (PP) as other plastics like polyethylene terephthalate (PET) and high-density polyethylene (HDPE).

In addition to the founding members of the Coalition like Braskem, there will also be an advisory committee of aligned organizations including Association of Plastic Recyclers, Closed Loop Partners, Sidewalk Infrastructure Partners, Sustainable Packaging Coalition, and World Wildlife Fund. Former EPA Administrator Carol Browner will serve as an independent advisor to the Coalition.

Earlier it was reported that the structure of Braskem Idesa polyethylene (PE) sales by destination over the past twelve months has changed due to sales in Asia. Total sales in the first quarter of 2020 were up 2% compared to the same quarter last year, but sales to Asia accounted for only 13% of sales made in the same period in 2019.

According to MRC DataScope, imports of PE to Russia decreased by 7% in January-June this year and reached 328,000 tonnes. The largest decrease in external supplies fell on high-density polyethylene (HDPE).

Braskem is a Brazilian petrochemical company headquartered in Sao Paulo. The company is the largest petrochemical company in South America and the fifth largest in the world in terms of production.
MRC

1. Rosneft income falls 77%, revenue down 51% in 2Q20

MOSCOW (MRC) -- Russian oil giant Rosneft saw its net income decrease by 77.8% and revenue decline by 51.3% in the second quarter of 2020, from the same quarter of last year, according to its financial results statement released on Friday. The company's net income attributable to Rosneft shareholders in the April-June period of 2020 came at 43 billion rubles (USD590 million), down from 194 billion rubles (USD2.66 billion) in the same period of 2019. The firm had a revenue of approximately 1.04 trillion rubles (USD14.22 billion) in the second quarter of this year, which was down from 2.135 trillion rubles (USD29.23 billion) the same quarter of last year. “The reporting period was characterized by unprecedented macroeconomic conditions including a sharp reduction of prices due to failing demand on the back of COVID-19 pandemic and lower production volumes due to realization of the new OPEC+ agreement," Rosneft Chairman and CEO Igor Sechin said in the statement.



MRC

MOSCOW (MRC) -- Ukraine's polypropylene (PP) imports totalled about 75,600 tonnes in January-July of this year, down 4% year on year.
All PP grades accounted for the decrease in shipments, according to a MRC's DataScope report.

July imports rose to 14,400 tonnes against 13,400 tonnes a month earlier under the pressure of the seasonal factor and the relaxation of quarantine restrictions. Overall imports of propylene polymers reached 75,600 tonnes in January-July 2020, compared to 79,000 tonnes a year earlier. Demand for all grades of propylene polymers decreased, but propylene block copolymers (PP block copolymers) accounted for the largest reduction.

The structure of PP imports by grades looked the following way over the stated period.
July imports of homopolymers of propylene to the Ukrainian market grew to 11,100 tonnes from 10,900 tonnes a month earlier, local companies increased purchasing of homopolymer PP raffia in Russia. Total homopolymer PP imports were 59,100 tonnes in January-July, compared to 61,500 tonnes a year earlier.

July imports of PP block copolymers into the country amounted to a little more than 1,400 tonnes compared to 1,500 tonnes in June, local companies decreased the volume of purchases of pipe polypropylene. Over the reporting period, about 7,100 tonnes of propylene block copolymers were imported against 7,500 tonnes for the same period in 2019.


July PP random copolymers imports increased to 1,700 tonnes from 700 tonnes a month earlier, local companies raised their purchasing of pipe PP random copolymers. Overall PP random copolymers imports reached 8,300 tonnes in January-July 2020, compared to 8,900 tonnes a year earlier.

Overall imports of other propylene copolymers totalled slightly over 1,100 tonnes over the stated period.

MRC

MOSCOW (MRC) -- Stavrolen, a major producer of polyolefins in Russia, had resumed its polypropylene (PP) production by the end of last week after a long forced shutdown, reported MRC analysts.

The plant's clients said Stavrolen had resumed its PP production by last weekend after the forced outage due to technical issues. In fact, the plant did not produce PP for almost one month, the forced shutdown began on 16 July. Shipments of the product to consumers will begin this week.

Stavrolen's (part of Lukoil) annual capacity of PP and high density polyethylene (HDPE) production is 120,000 and 300,000 tonnes, respectively.

It is also worth noting that Tomskneftekhim, Ufaorgsintez and Poliom will shut down their production capacities for scheduled turnarounds in September. The outage at these plants will be short and will last for about two weeks.
MRC