Published: 17 October 2023

On October 17 NC KazMunayGas JSC, Sibur and China Petroleum & Chemical Corporation (Sinopec) signed Share Purchase Agreements in relation of the Polyethylene Project.

The document between Kazakhstani and Chinese sides has been signed by KMG Chairman of the Board Magzum Mirzagaliev and Sinopec Chairman of the Board of Directors Ma Yongsheng in the presence of the President of Kazakhstan Kassym-Jomart Tokayev. The Head of State is on an official visit to PRC on October 17—18.

KMG sells to Sinopec a 20% share in Silleno LLP (the Project operator). At the same time, SIBUR also sells 10% of its share in Silleno LLP to Sinopec.

The ownership structure of Silleno LLP will be as follows: KMG — 40%, Sinopec — 30%, SIBUR — 30%. Completion of all legal procedures related to Sinopec’s entry into the Polyethylene project is expected in the first quarter of 2024.

The design capacity of the projected Polyethylene plant is equal to 1.25 million tons per year. The facility will be built within the territory of the Special Economic Zone in Karabatan in the close proximity of the Tengiz field (Atyrau region).

“I am confident that Sinopec’s entry as an equal partner of the Project will be a key to success of the Project. The experience of Chinese partners in engineering, construction and operation of petrochemical facilities will allow to build a modern and reliable plant to produce Polyethylene, as well as to arrange sales of end products to Chinese market in future” — M. Mirzagaliyev noted.

The project is currently at the Extended Basic Design (EBD) phase. The final investment decision (FID) by the Project participants is expected to be taken in 2024.

For Reference

The Polyethylene Project is implemented within the framework of the National Project on sustainable economic growth aimed at raising the well-being of Kazakhstani people and meets the long-term strategic goals of KMG.

To date the License Agreements with global companies Chevron Phillips Chemical, Univation Technologies, and Axens have been signed within the scope of the Polyethylene Project. This will allow to produce a wide range of products, including premium grades of Polyethylene, that are in high demand worldwide. The end products are expected to be sold both domestically and exported internationally.

The high demand for Polyethylene is based on the fact that this polymer is used to manufacture a large number of household and industrial applications and goods, such as, for example, polyethylene pipes, construction and packaging materials, automotive components and is even used for the inner lining of spaceships.

In March 2023, SIBUR officially completed its entry into the Polyethylene project.