17 Sep 2014
ERJ staff report (TP)
Moscow – SIBUR announced its ZapSibNeftekhim steam cracker project in Russia has received increased funding and is moving on to the next stage.
SIBUR’s board of directors approved the funding, with an overall capex budget for 2014 rising from RR 53 billion (€1.06bn) to RR 74 billion.
ZapSibNeftekhim's project is designed to operate a steam cracker (by Linde AG, Germany) with a capacity of 1.5 mtpa of ethylene, around 500 ktpa of propylene and 100 ktpa of butane-butylene fraction (BBF), along with units with a total capacity to produce 1.5 mtpa of various grades of polyethylene (by INEOS, UK) and a polypropylene unit of 500 ktpa (by LyondellBasell, Netherlands).
SIBUR said the cracker, polyethylene and polypropylene units’ FEED (front end engineering and design) has been completed. It has also signed an agreement to design infrastructure and off-site facilities with NIPIgazpererabotka, the Russian engineering centre in the gas processing industry.
According to preliminary estimates, total investment in the ZapSibNeftekhim project will amount to approximately $9.5 billion (€7.3bn), including the expenditure already incurred and costs budgeted for commissioning. Production site infrastructure construction and other works for the project are to be completed within five to five and a half years, which SIBUR said is the “international standard timeframe for building capacities of this scale”.
Dmitry Konov, CEO of SIBUR, said: “SIBUR has a strong financial position. Over recent years, the company has delivered on ambitious projects to expand its gas processing and fractionation capacity, improve transport infrastructure reliability, and build its first large polymer production capacities, providing the basis for a smooth transition into the next stage of the project.”
SIBUR's projects in the Tyumen region (western Siberia) are part of the investment agreement with the Tobolsk regional Government and the Tobolsk City Administration aimed at comprehensive development of the Tobolsk production site.
This agreement covered, among other projects, the construction of the Tobolsk-Polymer polypropylene production facility, put into operation in 2013, gas fractionation capacity expansion and railway infrastructure development, commissioned in 2014, along with the construction of the main pipeline between Purovsky Gas Condensate Processing Plant and Tobolsk-Neftekhim.
The parties provide support for the project under applicable law and the current agreement to ensure comprehensive development of the Tobolsk production site. It has now been agreed to extend the current investment agreements for 10 years – until 2024.
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