GPCA ’21: Russia must catch up on recycling, SIBUR contemplating two CCS projects – exec
DUBAI (ICIS)–Russia must catch up on waste collection and recycling to increase circularity of plastics, while moving away from oil and gas as it main source of exports to be ready for the upcoming decarbonised economy, an executive at the country’s petrochemicals major SIBUR said on Wednesday.
Sergey Komyshan, member of the board at SIBUR in charge of the petrochemical business, sales and marketing, said that the company is contemplating two carbon capture and storage (CCS) projects.
Komyshan added that SIBUR’s large expansions in polymers production would be well absorbed by both its Russian domestic market as well as overseas by booming sectors like packaging, construction, or transport, which need lighter and cleaner polymers to be more sustainable.
The company has in recent years started up large capacities for several grades of polymers at its ZapSibNeftekhim complex in Siberia; meanwhile, earlier this year it said it was mulling polyethylene (PE) and polypropylene (PP) plants in Kazakhstan.
On top of that, the company took over petrochemicals assets from Russian peer TAIF earlier this year, although the transaction was presented by SIBUR as a merger, rather than a takeover.
Adding yet more product to the market in coming year, the company is expecting to start up its Amur Gas complex in 2024 to produce, among others, more than 2.3m tonnes/year of PE and 400,000 tonnes/year of PP.
The executive spoke to ICIS on the side lines of the Gulf Petrochemicals and Chemicals Association (GPCA) annual forum.
Komyshan was confident the global markets will absorb SIBUR’s large capacities to come on stream and said those capacities – which will add to other expansions in North America or the Middle East, among other regions – would not pressure prices downwards.
Moreover, he said that many grades to be produced by SIBUR will be serve for the manufacture of high -performance polymers for which many sectors seeking to lower their carbon footprint are hungry for.
“Producing new grades will obviously make it much easier to enter new segments, especially outside Russia. Packaging is already one of the segments we are already present in, but we have also started focusing on such segments like construction – mainly in Russia but with time we’ll hopefully bring new materials [for the construction industry] to both the domestic market as well as overseas markets,” he said.
“The products we are offering companies in the construction industry will help them decrease their carbon footprint of buildings. This sector is under pressure, and will remain under pressure, in terms of sustainability.”
Komyshan said SIBUR was ready to “assist to build” collection systems in which the company would take part, but also to “participate in developing” legislation in Russia.
He added the company is also mulling several projects in recycled naphtha for its crackers although the projects are only “in the early stages”.
In polyethylene terephthalate (PET), the most used plastic to produce bottles, SIBUR is also developing a project, to be commissioned in 2022, to produce recycled PET (R-PET).
The SIBUR executive said Russia is behind in its recycling systems as well as in waste collection.
“Although a lot has been done by now and legislation is being put in place. There are 200 waste handling companies in Russia, although the value chain is still being created,” he said.
“The task we have now as a country is not only to help develop legislation, but also to help these newcomers [waste handling companies] with growing demand for the waste streams. Because waste, of course, can be used to produce recycled materials. The challenge now is to create new capacity to offtake some of the waste streams.”
CCS technologies, which were developed year ago but have only started to take off under regulatory pressure to energy-intensive sectors to lower their carbon emissions, could be a way for petrochemicals producers to transit to greener operations while still using electricity coming from fossil fuels production.
SIBUR has boarded the CCS train, said Komyshan, and is mulling two projects with a crude oil major to be developed in Russia, but he said he could not disclose what that company is, the location, or potential start-up dates.
“We see certain geographies and industrial processes where one can potentially built a cost-effective value chain to capture, transport, and store carbon it into existing depleted hydrocarbons deposits. We have partnered with an oil major for two projects, of which we’ll disclose more information in the future,” said Komyshan.
“They would be in western Siberia… we are not yet ready to take a final investment decision [FID], but it looks we may get positive results on this,” he added.
The SIBUR executive concluded that fossil fuels producing countries are likely to have decades ahead of them of exporting product: the 2050 targets are indicative, Komyshan came to say, but it is very unlikely the world will be net zero or carbon neutral in 29 years.
The Paris Agreement signed in 2015 by more than 200 countries aimed to limit global warming to an increase of 1.5-2degrees centigrade by 2100, compared with pre-industrial levels; several scientists think the world is on course for a global warming well-above that target.
“Going net zero and stopping using fossil fuels entirely by 2050 can be challenging. It requires huge amounts of investment, even for rich countries it would be a stretch, and in developing countries it will be hardly possible. Unless we have a huge technological breakthrough,” said Komyshan.
GPCA’s 15th annual forum runs in Dubai, United Arab Emirates (UAE), on 7-9 December.
Front page picture: SIBUR’s ZapSibNeftekhim
Interview article by Jonathan Lopez