SIBUR to expand Zapsibneftekhim – Kommersant

SIBUR may significantly increase propylene production at Zapsibneftekhim’s production site in Tobolsk. The company is going to build a new propane dehydrogenation unit and receive a reverse excise tax on raw materials for it, for which it must invest at least 110 billion rubles in Zapsibneftekhim by 2027. Based on these investments, the volume of future output may amount to several hundred thousand tons of propylene per year. Experts believe that SIBUR can copy the already operating installation, which is now expanding to a capacity of 560 thousand tons per year.

SIBUR intends to build a new complex for the production of propylene and its derivatives by propane dehydrogenation at the Zapsibneftekhim site in Tobolsk. This is stated in the notice of public discussions of preliminary environmental impact assessment materials and design documentation for the facility. The contractor is the design institute NIPIGAZ. Hearings will be held from April 28 to May 28. The company explained that the project involves the production of polypropylene, taking into account the maximum use of the existing energy and raw materials infrastructure. At the moment, the capacity of SIBUR’s Tobolsk site for propylene is 1 million tons, for polypropylene – 1 million tons.

The project will be implemented as part of an agreement between the company and the Ministry of Energy on the modernization of existing and creation of new facilities, Kommersant was told at SIBUR. Documents in the amount of 400 billion rubles. were signed at the end of January 2022. They assume that the chemical company will receive the right to a reverse excise tax on petrochemical raw materials (ethane and liquefied hydrocarbon gases, LPG). Companies can receive such a subsidy from 2022 at a rate of 9 thousand rubles. per ton for ethane and 4.5 thousand rubles. per ton for LPG with the right to provide a double tax deduction for them in exchange for guaranteed capacity development. The documents dealt with the modernization of existing and creation of new facilities at three sites of SIBUR – Zapsibneftekhim, Nizhnekamskneftekhim and Kazanorgsintez. The obligations of the enterprise to develop capacities in Tobolsk for 2022-2027 amount to at least 110 billion rubles, which is a legal requirement for obtaining a reverse excise tax.

Kommersant’s interlocutors on the market note that this is a new installation with a capacity of “several hundred thousand tons of propylene.” They say that while the expansion project was probably a long time in the making, it is now even more relevant given Russia’s oversupply of petrochemical feedstocks, in particular LPG, whose prices are at multi-year lows. Last year, SIBUR launched the modernization of the propane dehydrogenation unit in Tobolsk, which has been operating since 2013, increasing its capacity by 8.4%, to 560,000 tons per year. Turkish Stellar Construction acted as the general contractor.

According to Dmitry Akishin, Managing Director of Implementation, the construction of a new polypropylene complex is unlikely to cost the company less than the creation of an existing unit, in which about $1 billion was invested. Alexander Gadetsky, Technical Director of Maxton Engineering, believes that SIBUR will simply copy its already operating units for dehydrogenation and polypropylene with the same capacity. In this case, their cost will be lower, since the company ordered the first installations on a turnkey basis, which is a priori 20–30% more expensive than its own construction. In addition, the expert says, the company, with the help of NIPIGAZ, was significantly modifying the existing propane dehydrogenation unit. Mr. Gadetsky is confident that SIBUR will be able to buy the main equipment necessary for construction in Russia, although it may be necessary to order a reactor in China.

The Ministry of Finance is going to give the right to a reverse excise tax to synthetic rubber producers from 2024 (SIBUR became the largest of them in the Russian Federation after the purchase of TAIF). The size of the excise duty will depend on the exchange prices for natural rubber in Singapore, as well as butane and butadiene in Rotterdam, its maximum value will be 9.15 thousand rubles. per ton. In 2024, the volume of excise tax refunds on synthetic rubber, based on the forecasts of the Ministry of Energy, may amount to 3.5 billion rubles, in 2025 – 2.2 billion rubles. According to experts, the damper will help smooth out fluctuations in spreads between the cost of the final product and the price of raw materials, which will make the economic parameters of future petrochemical projects more predictable.

Olga Mordyushenko