Russia's SIBUR mulls building major petchem hub in W.Siberia

Sibur, Russia's largest petrochemicals company, is at the pre-FEED stage for the construction of a West Siberian petchem hub which would be one of the largest petchem plants in the world, Sibur's CEO Dmitry Konov said Tuesday at a press briefing.

The hub, Zapsibneftechim-2, is projected to produce 1.5 million mt/year of ethylene and around 2 million mt/year of polymers, comprising 1.5 million mt/year of polyethylene and 500,000 mt/year of polypropylene, Konov said.

With regard to the timing of the project, Konov said: ‘‘Even if we deploy all our capacities, it's not going to happen until 2017.’‘

He declined to comment on the possible size of investments in Zapsibneftechim. ‘‘It's still too early to give deadlines and investment figures,’‘ he said, adding that the project is still subject to approval by Sibur's board of directors.

The company expects to give preliminary investment figures in 2012, Sibur's executive director Mikhail Karisalov said.

‘‘2012 is the right time for this,’‘ Karisalov said.

Konov did however indicate that the investment would be very significant.

‘‘The project is ambitious even for a company the size and the financial strength of Sibur,’‘ he said, adding that the plan would be implemented gradually to protect the company's financial stability.

The plant is projected to use primarily West Siberian LPG as feedstock, Konov said, adding that the LPG would be delivered to the plant via the 1,000 km Purovsky-South Balyk-Tobolsk pipeline.

The 8 million mt/year pipeline, which is currently also at the design stage, is to link the Purovsky gas condensate processing plant with the West Siberian city of Tobolsk, the site for the projected petchem hub, he said.

The Purovsky plant is owned by Novatek, Russia's largest independent gas producer. Novatek's CEO Leonid Michelson holds 27.17% in the gas producer and 57.5% in Sibur.

In Tobolsk, Sibur already operates the petchem plant Tobolskneftechim, the largest in West Siberia, which produces 197,000 mt/year of butadiene, 83,000 mt/year of isobutylene and 120,000 mt/year of MTBE, according to Sibur's website.

In 2013, Sibur plans to launch production of 500,000 mt/year of polypropylene at a new petchem unit in Tobolsk, according to the website.