SIBUR advances grassroots petrochemicals complex

ZapSibNeftekhim LLC, a subsidiary of Russian petrochemical manufacturer OAO SIBUR Holding, Moscow, has started construction on its long-planned integrated ethylene, polyethylene and polypropylene production complex at Tobolsk in Western Siberia’s Tyumen region.

ZapSibNeftekhim LLC, a subsidiary of Russian petrochemical manufacturer OAO SIBUR Holding, Moscow, has started construction on its long-planned integrated ethylene, polyethylene and polypropylene production complex at Tobolsk in Western Siberia’s Tyumen region.

The first foundations have now been laid for the ZapSibNeftekhim (ZapSib-2) complex, which will include a 1.5 million-tonne/year ethylene steam cracker, four polyethylene (PE) production units with a production capacity of 1.5 million tpy, a 500,000-tpy polypropylene (PP) production unit, as well as 100,000-tpy butane-butylene fractionation (BBF) unit, SIBUR said.

The start of construction follows the January issuance of requisite permits by Tobolsk’s local government, which followed approval of final designs for the ZapSib-2 project by Russia’s Glavgosexpertiza (General Board of State Expert Review) in late 2014.

Most on-site preparations already have been completed, and contracts for detailed design work, equipment, and material supplies for the complex’s key process units have been signed and initiated, SIBUR said.

Most recently valued at a total capital cost of $9.5 billion, ZapSib-2, which was first announced in 2012, may face further delays.

Given the large capital investment required for the project, as well as the recent downturn in market conditions, the budget for ZapSib-2 moving forward now will be adjustable subject to exchange rates and the price of oil, which could change the project’s timeline, the company said.

“We have purposefully slowed down our project investment program in the current economic environment to avoid the risk of significant shifts in the schedule in the future,” said Dmitry Konov, SIBUR’s chief executive.

The shift to a flexible budget and schedule will help to guarantee the project is completed, Konov added.

As of late 2014, ZapSib-2 was scheduled to be commissioned in 2019-20, SIBUR said in a report to investors.

Technology

SIBUR awarded the following engineering and technology-related contracts for ZapSib-2’s major units shortly after announcing the project:

• Linde AG to provide licensing and front-end engineering design (FEED) for the 1.5 million-tpy ethylene plant (OGJ Online, June 22, 2012).

• Ineos Technologies Ltd. to provide licensing for its proprietary Innovene G and Innovene S processes for the manufacture of linear low-density and high-density PE. The two 400,000-tpy Innovene G plants and two Innovene S plants will produce the full range of Ziegler monomodal, Ziegler bimodal, chromium, and metallocene products for Russian and export markets, Ineos said in a June 29, 2012, release.

• Technip SA to provide FEED for the PE plant, the service provider said in a June 27, 2012, release.

• LyondellBasell to provide its Spheripol process technology for the single-line, 500,000-tpy PP plant, according to a July 9, 2012, release from LyondellBasell.

• ThyssenKrupp AG to provide FEED for the PP plant, according to an Aug. 21, 2012, release from ThyssenKrupp.

SIBUR also said it recently has let a contract to Russia’s OAO NIPIgazpererabotka to design infrastructure and off-site installations for the project.

Logistics

To be located near SIBUR’s current Tobolsk polymer production site, ZapSib-2 will have direct access to gas fractionation capacity at those installations, where fractionation capacity in March 2014 was expanded to 6.6 million tpy from 3.8 million tpy specifically to handle growing volumes of raw NGL supplies for the new project, the company said.

In 2014, SIBUR also completed construction of the Purovsk–Pyt-Yakh–Tobolsk pipeline, a 1,100-km raw NGL pipeline that will have throughput capacities of about 4 million tpy between Purovsk and SIBUR’s loading rack in Noyabrsk, 5.5 million tpy between Noyabrsk and Pyt-Yakh, and 8 million tpy between Pyt-Yakh and Tobolsk, SIBUR said in a recent report to investors.

Once fully commissioned in 2015, the company said it expects the new pipeline will further ensure raw NGL feedstock supplies for ZapSib-2.

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