According to the press service of Prime Minister Alikhan Smailov, the China Petroleum & Chemical Corporation (Sinopec) is considering the possibility of participating in promising projects in Kazakhstan. The service revealed this information after the prime minister’s meeting with President Yu Baocai of Sinopec.
«Prime Minister Alikhan Smailov and President Yu Baoсai discussed issues related to the implementation of new oil and gas projects. Sinopec has also underlined that it is considering the possibility of participating in other promising projects in Kazakhstan,» the press service said in a statement.
Sinopec has already participated in a range of significant projects in the oil and gas sphere, including the modernization of the Atyrau refinery. Given that President Kassym-Jomart Tokayev has set a goal of accelerating the development of the petrochemical industry in his address to the nation, the country’s cabinet believes that if the Chinese company takes part in the polyethylene production project, it will contribute to the entire economy of Kazakhstan.
«In this regard, the anchor project called Polyethylene is an important stage in the development of our petrochemical industry, and once it is implemented, it will have a multiplicative effect on the country’s economy. Considering that Sinopec is one of the world leaders in the petrochemical industry, the issue of the company’s joining the project as an equal partner has strategic importance,» Smailov said.
In turn, Yu Baocai noted that cooperation between Kazakhstan and China in the energy sector is developing at a high pace and is a significant contributor to improving the well-being of the people in both countries. He also proposed organizing a professional internship for Kazakhstani oil and gas industry specialists in China.
The construction of a polyethylene production plant with a capacity of 1.25 million tons per year (Polyethylene project) is being implemented by KazMunayGas (KMG, a subsidiary of Samruk-Kazyna). The plant will be built on the territory of a special economic zone in Karabatan in close proximity to the Tengiz field (the Atyrau region).
Initially, KMG’s only partner in the project was the Russian Sibur. However, on May 18, 2023, during President Tokayev’s visit to China, KMG and Sinopec signed an agreement on cooperation that allowed the Chinese company to join the project along with Sibur. As a result, KMG, Sinopec and Sibur are supposed to have 40%, 30% and 30% of the project’s shares respectively.
The final investment decision (FID) by project participants is expected to be made in 2024. According to KMG, as an equal partner in the project, Sinopec can play an essential role in the construction of petrochemical facilities thanks to its know-how and expertise. In addition, Sinopec is capable of facilitating sales of ready-to-use products in China.
In order to make the project meet the market requirements KMG has also signed agreements with Chevron Phillips Chemical and Univation Technologies and will use their technologies such as MarTECH ADL and UNIPOL PE. These agreements will allow the company to produce a wide range of products, including premium-grade polyethylene, which is in high demand throughout the world.
