Dow Chemicals and Gazprom to join hands

24-May-05

All the construction work of the Novy Urengoi gas-chemical factory, wholly owned by Gazprom, stopped in 1996 due to lack of funds. The robust demand for petrochemicals in Russia has rendered the revitalization of the project almost mandatory. Gazprom hopes to attract US$250 million worth of strategic investment in exchange for a stake in the Novy Urengoi factory. The rest will be borrowed, thereby making it possible to retain control over the enterprise. The US company, Dow Chemicals has now decided to join in this venture that could cost about US$500 million to complete. This plant will have a capacity to produce about 300,000 tpa of granulated and film polyethylene, as well as over 300,000 tons of ethylene pa. Polyethylene production in Russia in 2004 stood at 1,066,000 tons, of which it exported2,60,000 tons. Domestic demand stood at 978,000 tons, thus creating a shortfall in supply of almost 1,20,000 tons. Since the demand for polyethylene grows by 7.3% pa, this is looked upon as a highly promising project..