SINOPEC Finalizes its Participation in Kazakhstan's Polyethylene Venture

Prime Minister Olzhas Bektenov of the Republic of Kazakhstan hosted a gathering with key leaders from major oil and gas chemical companies, including Zhao Dong, President of China Petrochemical Corporation (SINOPEC), and Mikhail Karisalov, Chairman of the Board of SIBUR LLC. The primary agenda centered around the collaborative establishment of the inaugural integrated gas chemical complex dedicated to polyethylene production, an endeavor estimated at approximately $7.7 billion with an annual capacity of 1.25 million tonnes, representing 1% of the global capacity.

During the meeting, a trilateral protocol was inked, formalizing SINOPEC's participation in the venture. The ownership configuration of the complex is as follows: KazMunayGas holds 40%, SINOPEC 30%, and SIBUR 30%. The Prime Minister underscored the project's significance owing to its emphasis on generating high-value products.

Construction plans are underway for a gas separation complex (GSC) at the Tengiz field to provide the "Polyethylene" project with its primary feedstock, mainly ethane. The GSC's projected capacity is 9.1 billion m3 for dry gas processing annually, with an anticipated yield of 1.6 million tonnes of ethane. The ethane will then be transported via the main pipeline from Tengiz to the Karabatan site, situated within the territory of the FEZ NINT in the Atyrau region, where the polyethylene plant will be situated.

The production plan entails the creation of approximately 22 variations of polyethylene, leveraging licensed technologies from Chevron Phillips and Univation, with premium-grade variants constituting 40% of the total output. Polyethylene's ubiquity stems from its extensive applicability across both industrial and domestic spheres, rendering it the most widely used polymer globally.

Polyethylene finds diverse applications in numerous sectors, including medicine, prosthetics, defense, food processing, construction, and aerospace, among others. Its versatility enables its utilization in the fabrication of an extensive array of products, ranging from robust plastic pipes and construction materials to pharmaceuticals, syringes, prosthetics, bulletproof vests, astronaut attire, and automotive components. The primary target markets encompass Kazakhstan, CIS nations, China, Turkey, and various European countries. Concurrently, the pricing strategy for domestic consumption aims for a realization price lower than that of imports.

"The Head of State has pinpointed hydrocarbon deep processing as a pivotal area for advancing the oil and gas sector. Our economy's focal point lies in high-conversion production, generating products with substantial value addition along the technological chain and an outward focus on exports. The transition from initial ethane feedstock to the final polyethylene product results in a twentyfold increase in value, escalating from $80-90 to $1600-1800 per tonne. The Polyethylene project is poised to significantly drive the expansion of both the manufacturing sector and the nation's economy as a whole. According to expert projections, the project's contribution to the country's GDP by 2030 is estimated to approximate 1.2%," remarked Olzhas Bektenov.

Construction endeavors are projected to conclude by 2029, facilitating the creation of over 8,000 employment opportunities during the construction phase and approximately 850 jobs during operations. Acknowledging governmental backing, it was underscored that the project will be situated within a special economic zone, enjoying tailored infrastructure provisions and a specialized tax framework. In this vein, the Prime Minister urged project stakeholders to maximize local resource utilization.

Olzhas Bektenov emphasized the comprehensive state support provided for pivotal economic ventures, while concurrently urging heightened local content integration. To this end, a requisite list of goods and equipment earmarked for mandatory procurement from domestic manufacturers is envisaged. Furthermore, significant emphasis was placed on training Kazakhstani professionals and knowledge transfer, with a keen focus on maximizing local workforce participation, including managerial roles. Similar cooperative approaches are anticipated for forthcoming joint initiatives, extending beyond the "Polyethylene" plant to encompass additional infrastructure components such as the gas separation complex and trunk pipeline.