Page 8 - bne IntelliNews monthly magazine May 2024

8 I Companies & Markets bne May 2024
280,000 tpy of high density polyethylene and 100,000 tpy of polypropylene.
A total of ten units are contained on MTO’s relatively compact 225ha site that can easily be expanded in the future.
It has taken five years to go from drawing board to breaking ground construction of the plant has now begun and will take about two years to complete before it comes online sometime in 2026, according to Ruslan Navruzov, the technical director.
The MTO will be a full cycle plastics production complex based on methanol. It is being entirely funded by private investments, not from the budget. Private companies enjoy significant tax breaks and other perks as part of the Karakul Free Economic Zone, according to Bakhodur Khafizov, the CEO of the Karakul FEZ, which was established in 2021 to provide a home to the MTO plant.
“The Karakul FEZ is a cluster model: the plant processing natural gas into polymer raw materials and then into high added value products are all concentrated in one place,” says Khafizov. All the technology in the plant is being sourced from abroad and will be used under licence from international companies.
On the wall of the presentation centre, one of the few buildings that have already been completed, a quote from the president is transcribed on the wall of the centre: “Building a new Uzbekistan and laying the foundation for a third renaissance.”
The plastics that will be produced will mostly go to meet domestic demand in the food processing, packaging, construction and automotive sectors, another of Uzbekistan's industrial strengths, with the other half being exported to markets like China, Turkey and the other Commonwealth
of Independent States (CIS) countries.
Today the main site is little more than a 400-hectare patch of earth, although the first warehouses have gone up and pipe-making equipment for the plant has been imported and installed on the main site. However, a whole logistics and support centre is already functioning right next to site with warehouses and storage areas, customs post, railroad access, gantry cranes, reinforced concrete and asphalt plants.
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The total cost of the MTO is estimated at $3.3bn with another $700mn invested in the free economic zone development, but will generate an estimated $14bn over 25 years in revenues when it is online and create about 5,000 jobs. At the same time, it will reduce the country’s plastics import bill by some $500mn a year and earn another $350mn from exports, says Khafizov.
The plant will also get its own 500-MW solar-powered
power station as well as being connected to the Uzbek grid. Uzbekistan has become the green energy leader in Central Asia, capitalising on its copious sunshine and wind resources.
The plant will consume 1.3bcm of gas a year (the whole free economic zone will consume 1.9bcm of gas) and be connected to the domestic gas network. The country has suffered from a gas deficit in recent years that has caused an energy crisis in the last two winters, but a deal signed with Russia at the end of last year will reverse the flow of Soviet-era pipelines and import Russian gas to make up the shortfall.
The MO plant will also need 3,500 cubic metres of water
a year that will come from the nearby Amu Bukhara canal, as well as getting a new dedicated railway line to ship the finished product to customers around the world.
Partners
The project is owned by Uzbekistan’s leading private energy company Saneg that will supply the 1.3 bcm of feedstock gas per year. The EPC general contractor is Enter Engineering, which has wide experience in heading major industrial
and infrastructure projects. There are also half a dozen more partners that are providing design, environmental and legal advice.
The design and consulting partners include: John Wood Group Plc (UK), Topsoe (Denmark), Koch Industries Inc. (US), Chemtex Global Corp. (US), Scientific Design (US), Versalis (Italy), Sinopec (China) and Grace Catalysts Technologies (US).
The design and technical processes are already finished, and the detailed 3D model design phase is close to completion. The land plot is also already being levelled and the first warehouses and pipe workshops have already been built. Construction of the first chemical units will start in about June.
“The plastics that will be produced will mostly go to meet domestic demand in the food processing, packaging, construction and automotive sectors. The rest
will be exported”