United Petrochemical Co damps Sibur plans to boost output of PET precursor
MOSCOW. March 19 (Interfax) - Sibur will have to drop a project to build a terephthalic acid (TPA) production facility if Bashneft does not agree to supply the new plant with paraxylene, Sibur chief Dmitry Konov told journalists.
A competitor, United Petrochemical Company (UPC), earlier announced plans to build a plant to produce TPA and polyethylene terephthalate (PET), for which TPA is an input, in Bashkortostan jointly with Mexican Alpek. UPC plans to buy TPA feedstock, paraxylene, from Bashneft, which currently sells paraxylene to Sibur subsidiary Polief (Bashkortostan).
"In that case, a portion of the paraxylene available for further processing will disappear. We will might replace it with flows from Omsk Oil Refinery. We see the potential for deliveries of Kazakh paraxylene for the Russian market," Konov said.
Bashneft's paraxylene deliveries are currently tied up in yearlong contracts, he said.
"But a single massive project that uses up all of it [Bashneft's paraxylene output] is not being implemented. I would say that there is probably no chance that all of it will be brought together at the Blagoveshchensk facility," he said.
Konov stressed that Sibur is not considering any site for the new facility other than Polief, but did not specify the size of the possible increase in TPA production. Potential plans to expand TPA production capacity at Polief will depend on whether the "investment is made effectively and whether it utilizes paraxylene produced by the oil company [Bashneft]," he said.
"Will there be a future increase in TPA production volumes [at Polief]?" I am practically certain there will be. But not 600, not 800 not 350,000 tonnes. It will something less, in order to properly balance existing capacities, including ours at Blagoveshchensk," he said.
The project to increase Polief's PET capacity to 210,000 tonnes from 140,000 tonnes is practically completed, he said. "We are looking at dates for the ribbon-cutting ceremony," he said.
Polief is Russia's sole manufacturer of TPA, used in the production of PET. Sibur has considered opportunities to create TPA production capacity at the Omsk Oil Refinery jointly with Gazprom Neft .
