SIBUR and Moscow Oil Refinery establish PP joint venture

09-Sep-10

SIBUR and Moscow Oil Refinery established a joint venture for manufacture of polypropylene through acquisition by the petrochemical Holding of 50% share in the charter capital of NPP Neftekhimiya LLC. NPP Neftekhimiya LLC is an associated company of Moscow Oil Refinery JSC, the core business of which is manufacture of polypropylene. Technimont, Italy, is the general designer of the complex. The design capacity is 100,000 tpa. The complex is located in the territory of Moscow Oil Refinery. The enterprise will buy feedstock (propane-propylene fraction) from Gazprom Neft and other suppliers competitively, and will manufacture polypropylene as a finished product. The parties will consider an increase in capacity of NPP Neftekhimiya LLC's plants in the long term to 150,000 tpa of polypropylene. "Due to the new partnership, SIBUR is becoming the largest polypropylene manufacturer in this country, – Dmitry Konov, the President of SIBUR, told. – After the Company completes construction of the propylene manufacturing complex in Tobolsk, and joint plans for eventual expansion of Neftekhimiya are realized, the Russian market will finally turn from an importer into an exporter of one of the deep conversion products of raw hydrocarbons." As Anatoly Cherner, Chairman of the Board for OSC "Moscow Oil Refinery", remarked, "Partnership with SIBUR will allow the Moscow Oil Refinery to enlarge its sales market for processed oil products, as well as increase the efficiency of the Refinery's polypropylene production. Clearly, this decision is completely in line with developmental trends in the petrochemical industry, and represents a plus for shareholders in both the Refinery and SIBUR.