Kazakhstan to give Russia and China over a 60% share in its polyethylene project

The Russian petrochemical company Sibur and the Chinese Sinopec can both get a 30% stake each in the Kazakhstani polyethylene project Silleno, according to Dastan Abdulgafarov, deputy head of KazMunayGas (KMG) for strategy, investments and business development.

As the official noted, KMG is going to have a 40% stake in the project.

«The project’s shares might be distributed as follows: 29.9% for KMG, 10.1% for KMG Petrochem (a subsidiary of KMG), 30% for SIBUR and 30% for Sinopec,» Abdulgafarov said. However, he admitted that this is «only the target structure of the project» and the final decision will be made later.

Kazakhstani officials announced that the Chinese will join the projects in May 2023. At the time, CEO of KMG Magzum Mirzagaliyev said that Sinopec’s expertise in designing, constructing and exploiting sophisticated petrochemical facilities would contribute to the project.

The domestic demand for polymers in Kazakhstan is about 240,000 tons per year, including 67,000 tons of polypropylene and 173,000 tons of polyethylene. Moreover, the government is expecting that this demand will double to 400,000 tons of both types of products by 2030.

Kazakhstan and Russia agreed to establish a joint company to implement projects associated with polypropylene and polyethylene in November 2022. The polyethylene project with a capacity of 1.25 million tons per year is expected to be completed in the Atyrau region of Kazakhstan by 2028. The estimated cost of the projects is $7.7 billion, even though more accurate calculations will be available once the front-end engineering design (FEED) is over.