September launch for first phase construction of Sibur’s polyolefins complex

17-Aug-09

Sibur plans to launch in September, the first phase construction of its polyolefins complex with the erection of a 500,000 tpa polypropylene plant at Tobolsk adjacent to the existing site of its subsidiary Tobolsk-Neftekhim. The propylene plant and downstream polypropylene unit are expected to come onstream by 2010. An investment outlay of RUB52 mln has been planned for the entire project that will also include a 500,000 tpa polyethylene unit. Construction of this unit is part of the second stage of the project scheduled for completion and start up by 2012. Pursuant to a study carried out by Branan Environment, the PP plant has received formal environmental and social impact approval. Linde-KCA-Dresden (Germany) is engineering the project design, ordering equipment and managing the construction of the PP production unit. Output from the project will cater to demand from export markets of Europe. Sibur has the advantage of cheap feedstock availability over its European counterparts ad will also be able to compete effectively with Middle Eastern exporters. Sibur's planned polyvinyl chloride (PVC) plant at Nizhy Novgorod has been delayed further and was now expected to come on stream in Q2-2013. PVC demand is Russia is expected to benefit from the domestic construction sector, which was expected to show strong growth over the next decade. The proposed Tobolsk petrochemical hub is a case of slow implementation in Russia. In 1998, Gazprom first announced it would build a US$500 mln plant at Tobolsk with a capacity to produce 250,000 tpa of polypropylene (PP), due on stream in 2001. Sibur revised its plans and in 2006, announced to build new facilities with nameplate capacity up to 900,000 tpa of PP and up to 500,000 tpa of PE in Tobolsk. In March 2009, Tyumen regional government announced that the construction of the plant in Tobolsk was due to start in April, but it appears to have been delayed again.