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MOSCOW (MRC) -- SIBUR Holding,
Russia’s leading petrochemicals company and one of the most rapidly growing
petrochemicals businesses globally, and China Petroleum & Chemical
Corporation (Sinopec), China’s leading energy and chemical company, have closed
the deal to set up a joint venture (JV) at the Amur Gas Chemical Complex after
obtaining all the necessary approvals from the regulators of both countries, as
per SIBUR's press release.
SIBUR and Sinopec will hold interest in the JV
in the amount of 60% and 40%, respectively.
In June 2019, the parties agreed on the main
terms and conditions of the potential JV. Following the investment decision, all
corporate and regulatory approvals were obtained as required to close the deal.
Following the deal, the parties will gain joint control over the JV. (This will
result in deconsolidation of the asset from SIBUR’s balance sheet in the
consolidated financial statements under the IFRS.)
Set to become the
world’s largest basic polymer production facility, Amur GCC will have a capacity
of 2.7 mtpa, including 2.3 mtpa of polyethylene (PE) and 400 ktpa of
polypropylene (PP), and will be producing a wide range of grades. The
construction of Amur GCC proceeds 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.
The
Amur GCC project will help attract international investments in the Russian
economy while also making a considerable contribution to the national programme
of growing the nation’s non-commodity exports. Given the facility’s geography,
its products will be targeting Asian markets, primarily China, which is the
largest consumer of polymers globally. The Amur GCC project is expected to be
included in an intergovernmental agreement between Russia and China.
Amur
GCC will set the tone in global environmental and technology standards, in
particular through its reliance on renewable energy sources.
Amur GCC’s
budget is tentatively estimated at USD 10 bn to USD 11 bn and is subject to
adjustments as the project progresses. In December, Amur GCC attracted USD 1.5
bn in bridge financing from a syndicate of Russian banks. Gazprombank acted as
the lead arranger and lender, with Otkritie and Sberbank as arrangers and
lenders.
Dmitry Konov, Chairman of the Management Board at SIBUR Holding:
“SIBUR and Sinopec have a long track record of jointly delivering on large-scale
investment projects and implementing advanced production technologies. Creating
a joint venture is a major milestone in our Amur GCC project. With Sinopec’s
involvement, we will be able to maximise the project’s efficiency, in particular
optimising and balancing the facility's future debt portfolio, while also
enhancing its expertise in distribution across Asian markets.”
ZHANG
Yuzhuo, Chairman of Sinopec: “Amur GCC is a milestone in the cooperation between
Sinopec and SIBUR, and will also become a model for Sino-Russian energy
cooperation to extend to downstream chemical industry. The success of Amur GCC
will inject new impetus into advancing the high-quality cooperation between the
two countries in the fields of energy, chemical industry, investment, economy
and trade and play a positive role in effectively promoting the sound
interaction of domestic and international markets as well as the economic
development, employment and social well-being of the Far East region.”
Ethylene and propylene are feedstocks for producing PE
and PP.
According to MRC's DataScope report,
PE imports to Russia decreased in January-November 2020 by 17% year on year and
reached 569,900 tonnes. High density polyethylene (HDPE) accounted for the
greatest reduction in imports. At the same time, PP imports into Russia
increased by 21% year on year to about 202,000 tonnes in the first eleven months
of 2020. Propylene homopolymer (homopolymer PP) accounted for the main increase
in imports.
SIBUR is a uniquely positioned vertically integrated gas
processing and petrochemicals company. We own and operate Russia’s largest gas
processing business in terms of associated petroleum gas processing volumes and
are a leader in the Russian petrochemicals industry. As of 31 March 2014, SIBUR
operated 27 production sites located all over Russia, had over 1,400 large
customers engaged in the energy, chemical, fast moving consumer goods (FMCG),
automotive, construction and other industries in approximately 70 countries
worldwide and employed over 27,000 personnel.
Sinopec Corp. is one of the
largest scale integrated energy and chemical company with upstream, midstream
and downstream operations. Its principal business includes: exploring,
developing, producing and trading crude oil and natural gas; producing, storing,
transporting and distributing and marketing petroleum products, petrochemical
products, synthetic fiber, fertilizer and other chemical products. Its refining
capacity and ethylene capacity rank No.2 and No.4 globally. Sinopec listed in
Hong Kong, New York, London and Shanghai in August 2001. |
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