Page 62 - bne_Magazine_February_2019

62 I Eastern Europe bne February 2019
Sibur is building a $9bn new petrochemical complex in the heart of Siberia.
Plastics in the snow – Sibur takes the lead in Russia's burgeoning petrochemical sector
Ben Aris in Tobolsk
In Tobolsk's imperial heyday the Siberian city in the Tyumen region was the administrative centre for all the wilds of the taiga that stretch from Russia’s Ural mountains to the coast in Vladivostok. In those days it was a pros- perous trading city that made its money from the Tsarist-era oil: furs.
Founded in 1590, the city lost some
of its shine in the Soviet era until the modern version of oil was discovered in western Siberia in the 1970s. The city that sits on the confluence of the Tobol and Irtysh rivers is best known to Russians as housing the prison that was home to Fyodor Dostoyevsky, 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.
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Tobolsk was revived by the oil industry and it is now going through a second renais- sance as it is rapidly becoming the epicen- tre of Russia’s burgeoning petrochemical industry. Another two hours' drive from Tobolsk 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 quar- ter of this 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 Zap- Sib 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 prod- ucts to make, among other things plas- tics, polymers for construction materials, as well as car bumpers and babies' nap- pies, amonst other things.