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sibur_bigTobolsk, 15 October 2013. Tobolsk-Polymer, one of the world’s largest polypropylene production facilities, was commissioned at a grand opening ceremony attended by the President of the Russian Federation Vladimir Putin. This construction project has been hailed as the biggest investment project in the Russian petrochemical industry, says Media Centre company.

The opening ceremony was also attended by Alexander Novak, Russian Energy Minister; Vladimir Yakushev, Governor of the Tyumen Region; Leonid Mikhelson, Chairman of OJSC SIBUR Holding’s Board of Directors and Chairman of OJSC NOVATEK’s Management Board; Alexander Dyukov, Deputy Chairman of OJSC SIBUR Holding’s Board of Directors and CEO of Gazprom Neft; and Dmitry Konov, SIBUR’s CEO.

Vladimir Putin also chaired a meeting on the development of the petrochemical industry at the production site.

The Tobolsk-Polymer complex comprises two units – a 510 ktpa propane dehydrogenation (PDH) propylene production unit and a
500 ktpa polypropylene production unit. The complex is in the immediate vicinity of SIBUR’s operating plant, Tobolsk-Neftekhim, which will supply the feedstock – over 600 ktpa of propane. Tobolsk-Polymer is in the top 10% of most efficient polypropylene production facilities globally in terms of cash costs. Construction of the facility started in spring 2010 and was completed in standard time by global benchmarks.

The launch of the Tobolsk-Polymer facility will contribute to the important challenge of import substitution in Russia, where currently local polypropylene production is not sufficient to meet domestic demand. In 2012, polypropylene production in Russia was over 660 kt, with demand exceeding 880 kt. Average polypropylene per capita consumption in Russia stands at 6 kg, whereas in Eastern Europe the figure stands at approximately 14 kg, in Western Europe – 18 kg, and the United States – 17 kg. IHS Chemical forecasts that polypropylene consumption in Russia will grow by an average of 4.2% per annum until 2020. The launch of Tobolsk-Polymer will turn Russia from a net importer into a net exporter of basic polypropylene grades and the facility will carry out an important role in processing Russia’s associated petroleum gas (APG) products. Additional polypropylene supplies to the market will boost the development of processing industries, which will in turn further drive polymer consumption in various sectors of the economy – the automotive industry, construction, housing and utilities sector, and others.

Total investment into the project was approximately RR 60bn. The project was financed with the Company’s own funds and project financing from largest international commercial banks and development banks led by Vnesheconombank. Within the framework of the agreement credit lines totaling $1.441bn were opened in 2010, with $1.2bn backed by export credit agencies from Germany (Euler Hermes) and Italy (SACE). The transaction was named Best Project Finance Deal of 2010.

State-of-the-art technology was used in the design and construction of the complex to minimise the facility’s environmental impact. The site features a closed loop wastewater treatment system, preventing discharge to local rivers, lakes, swamps or any other under-/aboveground water reservoirs. Waste treatment facilities were also designed with extra capacity.

The PDH unit is based on technology provided by UOP (United States) to process propane into propylene, with Italy’s Maire Tecnimont SpA acting as an ЕРС contractor. The polypropylene unit employs a licensed technology solution provided by Ineos (UK), with Linde AG, Germany, acting as an ЕРС contractor.

Leonid Mikhelson, Chairman of SIBUR Holding’s Board of Directors said:

“SIBUR enables oil and gas producers to sell their by-products without having to build their own processing capacities. The company consistently invests in APG processing and transportation and fractionation of light hydrocarbons. Tobolsk-Polymer is an important stage of the corporate strategy of advanced processing to derive value-added petrochemical products, including basic polymers, and meet domestic demand while achieving import substitution.”

Background information:

Over 320 companies from 23 countries, including Russia, Korea, Japan, Germany, Italy, Switzerland, France, the United States, Belgium, the Netherlands, and India, were involved in the construction of the Tobolsk-Polymer complex. At peak of construction, over 6,000 people from 27 towns and cities across Russia and five foreign countries were employed at the site. Russian producers supplied 88% of materials used in construction.

The combined weight of large-sized equipment assembled during construction totaled 18 kt; 18 vessels, 992 railway cars, and 1,957 trucks were used to deliver that equipment. In October 2010, in a unique shipment operation, the facility’s largest single unit of equipment – propane dehydrogenation column – was delivered to the site. With its length of 96 metres, a diameter of 10.5 m, and weighing 1,086 tons, the column required a 102-metre long custom-built barge. The vessels covered the distance of 31,817 km, including 26,195 km by ocean to Arkhangelsk and 5,622 km from Arkhangelsk to Tobolsk.

Polypropylene is in the top three most widely used plastics globally. It is a chemically inactive and eco-friendly material used to produce food packaging and wrapping products, automotive parts, water pipes, household appliances, medical devices (inhalers, disposable syringes, etc.), and many other products.

15 October 2013