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bne February 2019 Eastern Europe I 63
In the last decade Sibur has built up its production 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 facili- ties in the Russian heartland, 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 tem- peratures will soon fall to minus 30°C but the workers just get special clothes. We should have the mechanical con- struction finished on time in April,” the construction site’s foreman tells me.
Sibur’s business is based on basic organ- ic chemistry. The plant may be hugely complex but the fractional distillation and the reactions needed to make the new compounds are fairly straightfor- ward. In essence what the company does is receive a soup of carbon compounds
– polymer chains of different lengths – and separates them out into their consis- tent parts. Then the different chains are cooked up to make a variety of products
“In the last decade Sibur has built up its production to the point where it is now a global top 10 petrochemicals-focused producer”
Sibur took over the original petrochem- ical 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.
that can be used as the feedstock for making more complex chemicals or turned into fuels and plastics granules that are used by “converters”, as Konov refers to the manufacturers that are his customers. Elastomers ( that includes synthetic rubber) is another important product that Russia has been making since Soviet times.
Complementary petrochemical and midstream businesses operating on market terms enables smoothing cash flow and earnings volatility
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