Sibur mulls building 1m tonne/year gas cracker - Dmitry Konov

31 August 2010 16:57  [Source: ICIS news]

LONDON (ICIS)--Sibur is considering building a pyrolysis gas processing cracker that will produce over 1m tonnes/year of ethylene, the president of the Russian chemical group said on Tuesday.

Sibur president Dmitry Konov said that a decision about the project – to be located at the existing Tobolsk-Neftekhim site at Tobolsk, in western Siberia – would be made late in 2011.

If approved, Konov said the project would become operational by 2015-2016.

After Sibur’s current group of projects is completed, from 2013 the company will show “healthy, positive cash flow”, which will help fund the project, according to Konov.

The plant will process natural gas liquids (NGLs) containing ethane, propane and butane into ethylene.

Russia’s feedstock supplies tend to be located far from domestic or export markets, leaving chemical producers there with the dilemma of locating either near to markets or feedstocks, but not both.

“The project site is located in western Siberia, where the climate is not overly severe. While it’s not ideally situated in terms of either domestic or export markets, this is a very good position in terms of obtaining its feedstocks,” said Konov.

“We would transport the production by either train or truck. Our existing NGL processing plant is located at this same site,” he said.

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Konov added: “A major challenge for Russian chemical producers is the fact that there are a lot of different feedstocks, such as LPG (liquefied petroleum gas, which contains propane and butane) and ethane, now available on the market.

“However, they tend to not be located in a suitable place. The logistics in this respect are not good for the company and neither is the climate.”

Konov said Sibur could either wait for government-sponsored infrastructure to be put in place, or go ahead on its own.

“We have the option of waiting for the government to supply logistical infrastructure such as pipelines for NGL transportation. Negotiations are currently under way, but no decisions have been made as of yet.

“Otherwise, we can try to perform a balancing act between high logistics costs against low feed stocks and strive to bring as much production as possible to the domestic market.”

Konov said there are huge potential reserves of LPG in Russia. At present, there are 7-12m tonnes/year of LPG available for the petrochemical production, but he said this could potentially rise to 20m tonnes per year by 2016- 2017.  

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By: Will Beacham
+44 20 8652 3214

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