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New plant helps lift earnings at Russian petrochemicals producer

March 09/2021

MOSCOW (MRC) -- Russia's largest petrochemicals producer, Sibur, said its core earnings rose 5% in 2021 as it expanded production with the launch of a new plant, but was also hit by lower prices of liquefied petroleum gas and naphtha, said Hydrocarbonprocessing.

Sibur has been looking to do an IPO for years, and said last year that it would be better placed for an initial public offering once the new plant, ZapSibNeftekhim in Western Siberia, was completed. However, it has yet to confirm IPO plans or give a timeframe.

The company said on Thursday that another plant under construction in Eastern Siberia, the Amur Gas Chemical Complex, could start operations six months ahead of schedule by mid-2024 and the cost of the project will probably be USD10 billion, down from previous estimates of between USD10 billion and USD11 billion.

The Amur Gas complex is expected to produce 2.3 million tons of polyethylene and 400,000 tons of polypropylene a year. China's Sinopec has acquired a 40% stake in the project and Sibur's Chief Financial Officer Peter O'Brien said the Chinese company paid around 18.27 billion roubles (USD248 million) for the stake.

Sibur said core earnings last year rose by 5.4% to 179 billion roubles (USD2.4 billion), with petrochemical product sale volumes rising 37% to 5.15 million tons. Revenue, however, slipped 1.6% to 523 billion roubles partly due to lower prices for liquefied petroleum gas and naphtha in the first half of the year. Adjusted net income fell 0.4% to 93 billion roubles.

As MRC reported before, earlier this weak, Sibur Holding and China Petroleum & Chemical Corporation (Sinopec), Chinas leading energy and chemical company, 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. SIBUR and Sinopec will hold interest in the JV in the amount of 60% and 40%, respectively.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 240,000 tonnes in 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020). Supply of exclusively PP random copolymer increased.

Sibur is a uniquely positioned vertically integrated gas processing and petrochemicals company. We own and operate Russias 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.


mrcplast.com
Author:Anna Larionova
Tags:petroleum products, PP, PE, neftegaz, petrochemistry, Sinopec, Amurskiy GHK, ZapSibNeftekhim, Sibur Holding.
Category:General News
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