Sinopec might get stake in Kazakh polyethylene project on par with SIBUR's
MOSCOW. May 18 (Interfax) - KazMunayGas (KMG) and China Petroleum & Chemical Corporation (Sinopec) signed a heads of agreement Thursday on the joint implementation of a project to produce polyethylene in the Atyrau region of Kazakhstan, the Kazakh oil and gas company reported.
The agreement was signed during President Kassym-Jomart Tokayev's state visit to China.
"The document calls for Sinopec to join the project as a full-fledged partner on par with [Russian petrochemical group] SIBUR. As part of Sinopec joining, in future the parties will sign a contract on the purchase of an equity stake and other binding documents," KMG said in a press release.
The project participants are expected to make a final investment decision in 2024, the company said.
"I am confident that Sinopec's successful experience in the design, construction and operation of similar technologically complex petrochemical facilities will have a positive impact on our project, as well as increase the investment appeal of Kazakhstan's petrochemical sector," KMG chief executive Magzum Mirzagaliyev was quoted as saying in the release.
Sinopec joining the project as an equal partner is expected to make it possible to use the company's technology and expertise in the construction of petrochemical facilities, as well as set the stage for future sales of finished product in China.
Kazakhstan's sovereign wealth fund Samruk-Kazyna, KMG, SIBUR Holding and participants in the operating companies of the Polypropylene and Polyethylene petrochemical projects signed the main documents on the formation of joint ventures based on Kazakhstan Petrochemical Industries Inc. (KPI Inc., Polypropylene project) and Silleno (Polyethylene project) in November 2022.
The parties defined the terms of their partnerships in the joint ventures in the National Industrial Petrochemical Technopark special economic zone in Atyrau region, including investment in the project to build a polyethylene plant with capacity to produce 1.25 million tonnes per year, as well as the procedure for selling the finished product of a polypropylene plant with capacity of 500,000 tonnes per year.
SIBUR holds a 40% stake in each joint venture. The KPI Inc. polypropylene plant was launched in November 2022 and has been gradually increasing production since then.