Gazprom's petrochem arm signs JV with Dow to set up JV

28-Nov-07

Gazprom's petrochemical division, Sibur Holding, has signed a memorandum of understanding (MOU) to set up a joint venture with Dow Chemicals. The deal will allow the Russian company access to new petrochemical facilities set up by Dow in Germany. As a reciprocation of this, Dow will refine gas at Gazprom's fields in the Yamalo-Nemets region in the north of Russia. The deal is in its preliminary stages and would get the go ahead if it proves economically viable. The move is likely to to meet the scrutiny of the European Commission, which has become increasingly concerned that Gazprom provides Europe with a quarter of its energy and could use gas as a tool of foreign policy. A partnership with Russia could help Dow, the world's largest chemical company, to build up its petrochemical industry. A joint venture based on Dow's new petrochemical facilities in Germany could give Gazprom a solid foothold in the German petrochemical industry.