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December 14, 2018 www.intellinews.com I Page 2
Plastics in the snow: Sibur takes the lead
in Russia's burgeoning petrochemical sector
the iconic Russian writer whose books became much darker after his sojourn in the squat white prison building that still sits on the main square opposite the church in the heart of the city.
Tobolsk was revived by the oil industry and it is now going through a second renaissance as it
is rapidly becoming the epicentre of Russia’s burgeoning petrochemical industry. Another two hours drive from TYumen into the swampy taiga is the Sibur petrochemical plant that is in the final stages of constructing the $9bn ZapSib polymers plant that was launched in 2015 and comes online in the second quarter of next year. The plant
will eventually treble the company’s output of polymers as well as doubling its revenue.
Russia is famous for its raw materials production but after almost a quarter century the economy is now moving up the value-added curve and Sibur’s ZapSib project epitomises that change.
Brownfields to greenfield
Russia has made most of its money exporting oil and gas and was the biggest exporter of crude in the world until October, when the US overtook it for the first time on the back of its shale revolution.
However, the process of lifting oil and gas out of the ground produces a lot of other long carbon chains that are not as immediately useful as crude oil and methane gas. Companies used to simply flare off these other products, a family of “-enes” that come up the pipeline with the more obviously sellable polymers.
Sibur’s business is to take all these other compounds, separate them out and turn them
into a smorgasbord of useful products to make, among other things plastics, polymers for construction materials, as well as car bumpers and babies' nappies, amonst other things.
In the last decade Sibur has built up its produc- tion to the point where it is now a global top 10 petrochemicals-focused producer. It works with all the Russian oil and gas companies, collecting their by-products and sending them through its own 2,712km of pipelines that spread out across Western Siberia to Tobolsk for processing and then to another 22 facilities in the Russian heart- land, of which Tobolsk is the biggest.
“We purchase by products from oil and gas companies – associated petroleum gases (APG) from oil companies and natural gas liquids (NGL) from gas companies – collect them from the production site, bring into one pipeline and process them into polymers and other products,” Sibur CEO Dmitry Konov told bne IntelliNews in an exclusive interview.
At the ZapSib construction site the fractional towers are already looming over the workers who are connecting the various crackers and boilers up with cocoons of pipes and pumps. Between each unit run muddy canyons where gangs of workers wander. The canopy of brightly coloured pipes gives the whole place the feeling of some sort of icy tropical forest.
“We don’t stop for the winter. The temperatures will soon fall to minus 30°C but the workers just get special clothes. We should have the mechanical construction finished on time in April,” the construction site’s foreman tells me.
Sibur took over the original petrochemical facility, a Soviet legacy plant built in the 70s, and modernised it. That plant was then extended with another larger facility to produce polymers in 2013. ZapSib is a $9bn greenfield project that uses the most modern technology and already dwarfs the other two facilities.