Russian petrochemical company Sibur said its plans to build a gas chemical complex in Russia's Far East will require preliminary investments of up to $8 billion and it is still looking for Asian partners.
Sibur said a year ago that it had been in talks with a number of Chinese investors about participating in the project to build the complex in Amur.
Sibur's Chief Executive Officer Dmitry Konov told Reuters in a recent interview, that the company, Russia's largest petrochemicals company, was still talking to investors, without giving details on their progress.
"We look at the implementation of the Amur complex as a joint venture, that's why the investments will be shared among the partners," Konov said.
He estimated preliminary investments in the Amur complex at $7 billion-$8 billion.
The plant will be built to serve Asian markets as part of a broader plan by Russian gas export monopoly Gazprom to supply gas to China.
Gazprom will supply the complex with around 2 million tonnes of ethane per year.
The plant will also enable Sibur to diversify into Asia.
"The location of the Far Eastern project is not usual for us," Konov said. "At the moment, our supplies to Asia are not that big. That's why we see benefits in Asian partners."
Sibur said last year that it had been in talks with China's Sinopec, which holds a 10 percent stake in Sibur, about investment in the project. A spokeswoman for Sibur declined to comment on Friday on whether Sinopec might invest in the project.
Konov said in March that a final decision on investments would be taken next year.
Sibur expects the plant to start operating after 2024, following the launch of Gazprom's own gas processing plant, also called Amur, which will process the gas before it is exported to China. Sibur's complex will produce different forms of ethylene from the gas supplied by Gazprom's plant.
Sibur currently mainly serves clients in the former Soviet Union, although its polymer exports are set to rise with the launch of a $9 billion plant in Tobolsk in Western Siberia by 2020.
Sibur also has been in talks with Saudi Aramco to set up a venture to produce synthetic rubber, a move highlighting growing cooperation between OPEC leader Saudi Arabia and Russia, the biggest non-OPEC oil exporter.
Businessman Leonid Mikhelson, the head of and a major shareholder in Russia's largest gas producer Novatek, owns 48.5 percent of Sibur. His business partner Gennady Timchenko owns 17 percent, while China's Sinopec and Silk Fund control 10 percent each.
Once the Amur and Tobolsk plants are up and running, Sibur will cut exports of liquefied petroleum gas (LPG), the feed stock for petrochemicals production.
Analysts forecast production in the former Soviet Union of basic polymers, such as polyethylene and polypropylene, will more than double to 9.6 million tonnes per year by 2024, from 4 million tonnes in 2017.
Demand for basic polymers in the former Soviet Union is expected to rise to 5.3 million tonnes, from 4 million tonnes.
(Writing by Vladimir Soldatkin; Editing by Susan Fenton)
AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week