01 October 2001 00:00 [Source: ICB Americas]Sibur, the Russian petrochemical producer, confirms that it is in talks with MOL, the Hungarian oil and gas company, and Hungary's government about supplying feedstocks to the country's petrochemical sector.
The company, a subsidiary of Gazprom, the Russian gas giant, plans to establish a strong position in Hungary's petrochemical sector as part of a long-term objective of becoming a major player in the Central and Eastern European (CEE) petrochemical market.
It has already made clear its intentions to take over BorsodChem in which it has a 25 percent stake. CE Oil & Gas, a Vienna, Austria-based investment company, which is considered to be a Sibur ally, has just acquired a 59 percent stake in BordsodChem, a Hungarian PVC and isocyanates producer.
Sibur aims to become a long-term supplier of ethylene and other feedstocks to BorsodChem and, if necessary, TVK, Hungary's other major petrochemical company, which is controlled by MOL. Ethylene would be delivered mainly by pipeline from Oriana, an Ukrainian ethylene producer and an affiliate of Lukoil, the Russian oil company with which Sibur has a cooperation agreement in petrochemicals.
"We have decided with MOL and the Hungarian government to set up a working committee to look at means for future cooperation," says a Sibur official.
Sibur sees BorsodChem playing a key role in the Russian company's expansion plans in the CEE region.
"The integration of petrochemicals in Central Europe could be achieved with the help of a petrochemicals complex at the center of which would be BorsodChem," the official says. "BorsodChem is near the border (with the Ukraine), so we can provide it with ethylene and other raw materials."
Sibur wants MOL to back a feedstock supply arrangement because the pipeline from Oriana is not only owned by TVK but is routed through its petrochemical site at Tiszaujvaros.
The Russian company also confirms that it is interested in acquiring a 51 percent stake, owned by a private investment group, in Dina, the Croatian petrochemical producer, which has a site on the island of Krk on the Adriatic coast. "Dina does not have much petrochemical capacity but its site is in a very good location for access to Western European markets," says one consultant.
Sibur is also building up links with Western European chemical companies. It has been in discussions with BASF about possible joint ventures.
"Joint working groups have been set up but there has not yet been any agreement on specific projects," says a BASF spokesman.
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