FocusRussia's Sibur to expand all business divisions in 2010

17 February 2010 15:15  [Source: ICIS news]

By Franco Capaldo

LONDON (ICIS news)--Sibur has set its sights to expand throughout 2010 and beyond, with development projected to happen within all of its main business divisions, the Russian petrochemical company said on Tuesday.

Sibur said it would invest between roubles (Rb) 30bn ($999m, €726m) and Rb32bn in 2010, compared with the Rb29bn it spent in 2009 to develop the company, however the company added that this sum would be modified every quarter of the year as the situation in the economy and market changed.

“After 2015 Russia will be the leading producer of petrochemical raw material. Until this time Sibur must become a global company," said CEO Dmitry Konov.

“Global not in sense of size, but in the sense of global quality of our products,” Konov added.

Sibur wanted to increase the output of organic synthesis products 25.6% to 1.22bn tonnes in 2010 and that the main challenge and task for the company was to build new facilities which represented a visible size on the global market, as most of its current plants that produce the product were built 30 to 40 years ago, a spokesperson said.

The spokesperson added that Sibur would decrease polymers output 5.7% to 563,000 tonnes/year in 2010.

Sibur’s key projects for 2010 included the construction of a 500,000 tonne/year polypropylene production complex in Tobolsk, in the Tyumen Region. The plant, which required an investment of about Rb60bn, has been largely financed through loans from Vnesheconombank (VEB) and was expected to come on stream in the fourth quarter of 2012, the spokesperson said

In 2009, engineering, procurement and construction (EPC) contracts for the project were made with Tecnimont and Linde.

Sibur also said that in the first quarter of this year it would start construction of a 330,000 tonne/year polyvinyl chloride (PVC) plant in the Nizhny Novgorod region to come on stream in 2012. In June 2007, Sibur formed a joint venture, RusVinyl LLC, to build the PVC plant, which has been expected to cost around Rb26.8bn (€650m).

RusVinyl is owned on parity basis by Sibur and SolVin, in which Solvay owns 75% and BASF has a 25% stake.

Additionally Sibur said construction of its 220,000 tonne/year ethylbenzene facility, with a 135,000 tonnes/year capacity styrene production, and a new production of expandable polystyrene with 50,000 tonnes/year capacity at Sibur Khimprom has been planned for completion by the end of 2010, the spokesperson said.

Within its hydrocarbon feedstock business, Sibur has been looking to intensify the work it does with oil and gas companies and invest in its hydrocarbon feedstock division, which provides the raw material for the stages of petrochemical reaction.

Discussions have taken place with leading Russian oil companies Rosneft and Gazprom Neft, over further opportunities for constructing gas processing plants in western and eastern Siberia, the spokesperson added.

In 2010 the company has planned to increase production of liquefied petroleum gas (LPG) by 3% year on year to 3.4m tonnes/year, increase production of dry gas 2% to 15.2bn cubic metres, and produce 4.2m tonnes/year of natural gas liquids (NGL), which would be a 17% rise from 2009.

The spokesperson said that Sibur aimed to produce 20bn to 21bn cubic metres/year of associated petroleum gas (APG) by 2012.

Additionally, Sibur's construction of a port for the export of LPG and light oil products at the sea trading port of Ust-Luga, in the Leningrad region of northwestern Russia, would start this year with start-up of the complex expected in the fourth quarter of 2012.

At the end of last month Sibur was granted government approval to build the project, estimated to cost around Rb3.9bn, which would be capable of transporting 1.5m tonnes/year of LPG and 2.5 tonnes/year of naphtha.

The spokesperson said that the construction of a gas processing expansion at Noyabrsk, in western Siberia, with a capacity of up to 1m tonnes/year, was also a key project for Sibur, as well as the reconstruction of the low temperature condensation unit at its gas processing facility at Gubkinsky.

Sibur has also anticipated investment in its synthetic rubbers division and expansion of its rubber output in 2010 by 27% to 431m tonnes a year - however that growth would compensate a 29.3% drop in output recorded in 2009 compared to 2008.

This year Sibur planned to design a new 50,000 tonnes/year thermostatic elastomers (TEP) production facility at Voronezhsintezkauchuk, which would add 10% to the whole range of the company’s synthetic rubbers division.

Sibur would also launch a new polyisoprene rubber facility in Tolyattikauchuk in the first quarter 2010 which would increase product output by 15%, the spokesperson said.

($1 = Rb30.01, €1 = Rb41.30)

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By: Franco Capaldo
+44 (0)20 8652 3214

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