SIBUR-associated & natural gas prices - Issue 316 || PKN Orlen energy - Issue 323 || PDH Polska-polyppropylene project - Issue 323 || Unipetrol’s investment into polyethylene - Issue 323 || Ciech-polyolefin trade based on Iranian supply - Issue 323 || Grupa Azoty-new polyamide plant start-up - Issue 323 || BorsodChem-new chlorine plant - Issue 323 || Russian chemical production, Jan-Aug 2017 - Issue 323 || Russian chemical trade balance - Issue 323 || Delivery of equipment to ZabSibNeftekhim-August 2017 - Issue 323 || SIBUR-ethane for Amur Gas-Chemical Complex - Issue 323 || VNHK-Saipem - Issue 323 || Rosneft, three cluster approach for petrochemical investments - Issue 323 || Tatarstan-ethane expansion for Kazanorgsintez - Issue 323 || Russian ethylene production Jan-Aug 2017 - Issue 323 || Russian propylene exports, Jan-Aug 2017 - Issue 323 || Russian propylene sales Jan-Aug 2017 - Issue 323 || Russian styrene sales Jan-Aug 2017 - Issue 323 || Russian HDPE production, Jan-Aug 2017 - Issue 323 || Russian polypropylene, Jan-Aug 2017 - Issue 323 || Russian PVC, Jan-Aug 2017 - Issue 323 || Russian polycarbonate, Jan-Aug 2017 - Issue 323 || Russian paraxylene, Jan-Aug 2017 - Issue 323 || PTA imports, Jan-Jul 2017 - Issue 323 || Russian MEG, Jan-Aug 2017 - Issue 323 || Russian benzene production, Jan-Aug 2017 - Issue 323 || Russian benzene sales, Jan-Aug 2017 - Issue 323 || Russian orthoxylene sales, Jan-Aug 2017 - Issue 323 || Russian orthoxylene exports, Jan-Aug 2017 - Issue 323 || Russian phenol production, Jan-Aug 2017 - Issue 323 || Russian C4s, Jan-Aug 2017 - Issue 323 || Kazan Plant of Synthetic Rubber-silicon project - Issue 323 || Russian synthetic rubber producer news - Issue 323 || Russian methanol exports, Jan-Aug 2017 - Issue 323 || Russian methanol domestic sales, Jan-Aug 2017 - Issue 323 || Metafrax-Casale, 2 October 2017 contract - Issue 323 || Gazprom-gas supply agreements for methanol and fertiliser projects - Issue 323 || Yatek methanol project-Japanese involvement - Issue 323 || Russian butanol production, Jan-Aug 2017 - Issue 323 || Saratovorgsintez-acrylamide project - Issue 323 || Calcium hydroxide Novocheboksarsk - Issue 323 || Ukrainian polymer imports, Jan-Aug 2017 - Issue 323 || Karpatneftekhim restarting export activity - Issue 323 || SOCAR completes overhaul of cracker and polyethylene plant - Issue 323 || SOCAR-chemical exports, Jan-Sep 2017 - Issue 323 ||
 


CIREC Blog

PKN Orlen Q4 & 2017

PKN Orlen’s fourth-quarter net profit in 2017 fell by 11% to Kc 1.59 billion ($477.42 million) as higher oil prices hit its refining margins.  For the whole of 2017 the Orlen Group generated a record EBITDA result of zl 10.4 billion, including a record result from the retail division over zl 2 billion.  The group refined 33.2 million tons in 2017 from its refineries in Poland, the Czech Republic and Lithuania, against 30.3 million tons in 2016.

PKN Orlen said that in the fourth quarter of 2017 the group recorded the LIFO EBITDA result at the level of zl 2.02 billion, helped by an 8% increase in revenues. 

PKN Orlen Group Chemical Production

(unit-kilo tons)

Product

Jan-Dec 17

Jan-Dec 16

Monomers

877

680

Polymers

543

283

Aromatics

339

249

Fertilisers

1,088

1,158

Plastics

395

371

PTA

519

601

According to the Plock concern, in the 12 months of 2017 investment outlays in the entire Orlen Group reached the level of zl 4.6 billion (with the zl 5.5 billion assumed earlier), of which zl 2.9 billion was allocated to the downstream segment (refinery, petrochemicals) and energy), and 0.8 billion zlotys for the upstream - extraction segment, while 0.7 billion zlotys for retail, and 0.2 billion zlotys for corporate functions.  In 2018, investment outlays in the Orlen group are to amount to zl 4.8 billion, with zl 3 billion in the downstream segment, zl 0.8 billion in the upstream segment, retail - zl 0.7 billion, and corporate functions zl 0.3 billion.

In Orlen’s petrochemical division, monomer production increased from 680,000 tons in January to December December 2016 to 877,000 tons in 2017 whilst polymer production rose from 283,000 tons to 543,000 tons. 

In the PTA sector production at Wloclawek was down in the fourth quarter due to force majeure, with volumes dropping to 104,000 tons against 159,000 tons in the third quarter.

Unipetrol Q4 & 2017

Unipetrol increased its net profit by 9% to Kc 8.7 billion in 2017, whilst sales rose 39% to $122.5 billion.  For petrochemical products, it has grown even 86% to roughly two million tons, due to a significant increase in the use of ethylene.  Almost a quarter of the volume of sales of the petrochemical products of the holding was carried out by Spolana, which closed last year with a net profit in 2017 of zl 433.5 million.

Czech Petrochemical Exports (unit-kilo tons)

Product

Jan-Dec 17

Jan-Dec 16

Ethylene

67.0

4.1

Propylene

25.3

6.2

Butadiene

5.3

3.3

Benzene

19.4

11.6

Ethylbenzene

127.3

24.8

In 2017 the group recognized compensation from insurance for the 2016 cracker fire valued at Kc 2,754 million in connection with steam cracker unit accident.  In the first two quarters of 2016 the group recognized compensation of Kc 3,934 million and Kc 3,918 million respectively.  In the second quarter in 2017 the group succeeded in agreeing with insurer the final settlement amount of the claim relating to the FCC nit accident at Kralupy, concerning property and mechanical damage as well as loss of business profits worth Kc 1,320 million.

Unipetrol’s refinery and petrochemical sector recorded an operating profit of Kc 13.5 billion, which was 21% more than in 2016.  The volume of refinery products rose by 9% to 6.8 million tons. 

A smaller incident than the 2016 cracker fire took place in December 2017 when Unipetrol encountered an accident which reduced the operation of the hydrogen and ammonia production unit.  Production was fully restored in January.  Due primarily to the incident in December coupled with lower margins Unipetrol’s net income in the last three months of 2017 fell by 82.3% to Kc 737 million.

Czech Polyethylene Trade (unit-kilo tons)

Exports

Jan-Dec 17

Jan-Dec 16

Jan-Dec 15

LDPE

80.1

66.6

66.0

HDPE

233.5

100.5

215.4

EVA

10.2

1.0

1.4

Other

3.5

20.7

19.7

Total

327.3

188.8

302.4

 

 

 

 

Imports

Jan-Dec 17

Jan-Dec 16

Jan-Dec 15

LDPE

168.5

159.8

156.7

HDPE

111.6

135.1

115.0

EVA

1.2

9.8

8.8

Other

38.9

31.2

33.1

Total

320.3

335.9

313.6

Unipetrol raised its operating profit by almost half in 2017 to Kc 1.4 billion.  In 2017, the company invested in the purchase of new locomotives, the reconstruction of the T700 heating plant in Litvínov, the modernization of Spolana or the expansion of Stop Cafe refreshments at petrol stations.  The construction of a new polyethylene unit PE3 is due to be completed at the end of this year.

Czech polymer trade 2017

Czech polyethylene imports totalled 320,300 tons in 2017 against exports of 327,300 tons.  Over the period 2010 to 2017 the surplus of exports over imports has gradually declined due to increased consumption levels.  2015 and 2016 were anomalous years due to the extended outage at the Litvinov cracker, and particularly in 2016 imports significantly outstripped exports totalling 335,300 tons against 188,800 tons.  For 2018 the balance between imports and exports is expected to remain balanced.  Production of Unipetrol’s new polyethylene unit is scheduled to start production by the end of 2018 and thus the prospects for 2019 indicate a surplus of exports over imports. The new polyethylene unit is designed to replace the older one of the two units operated by Unipetrol at Záluží

HDPE exports from the Czech Republic totalled 233,500 tons in 2017 against 100,500 tons in 2016, following the restart of the cracker.   Imports of HDPE showed only a small rise in 2016 when production activities were affected for most of the year.  

Polypropylene imports into the Czech Republic far outstrip export activity, which is part of the reason why Unipetrol is increasing its capacity for polypropylene production from 300,000 tpa to 350,000 tpa.  Polypropylene is currently supplied by Unipetrol to European markets and this market is seen as offering good potential capacity will increase, but Unipetrol does not envisage changing the technology. 

In 2017 imports of polypropylene totalled 506,000 tons against 517,000 tons in 2016.  Following the restoration of cracker activity at Litvinov in 2016 exports of polypropylene rose to 280,000 tons in 2017 from 191,000 tons.

Regarding Czech PVC trade, imports totalled 133,100 tons in 2017 against 124,400 tons in 2016 whilst exports rose from 77,100 tons to 96,500 tons.  Over the period 2010 to 2017 PVC imports have risen to outstrip exports. 

Spolana 2017

Spolana exceeded its expectations last year, posting sales of Kc 4.8 billion (up 28%) and increasing net profit climbed to Kc 433 million.  From 2009 to 2016, the company recorded annual losses, the largets of which was Kc 1203 milion in 2014.  In 2017 Spolana sold 402,000 tons of chemical products (especially PVC and caprolactam) and the company has recently started production of granular ammonium sulphate for use in agriculture.

Spolana closed its amalgam electrolysis unit in November 2017 in compliance with environmental and statutory requirements regarding the use of mercury.  Spolana now has to produce PVC using externally purchased intermediates. The company is currently finalizing a feasibility study of a new membrane electrolysis unit and will decide over the next few months whether to proceed.

The total volume of investment in the modernisation and greening of Spolana's operation is expected to reach approximately Kc 3 billion by 2021.  Besides the new electrolysis, Spolana also needs to invest in a new natural gas source to replace the old brown coal boilers.  When Unipetrol bought Spolana for symbolic one million euros in June 2016, it was under fire by criticism of minority shareholders. However, the outlook apprears far more promising for the Neratovice plant. 

Czech chemical trade 2017

Chemical exports from the Czech Republic comprise ethylbenzene, caprolactam, plasticizers, plasticizer alcohols, etc, whilst imports cover products such as benzene, methanol, oxo alcohols, glycols and TDI.   Methanol imports, usually supplied mainly from Germany and Russia, totallled 96,876 tons in 2017 against 89,648 tons in 2016.   In 2017 benzene imports amounted to 81,154 tons of which most was sourced from Poland.   Ethylbenzene was the largest export commodity in 2017, totalling 125,561 tons of which nearly all was supplied to Synthos in Poland.   

Czech Chemical Exports

(unit-kilo tons)

 

2016

2017

Caprolactam

40

40.8

Phthalic Anhydride

14.9

16.4

DOP

0

9.6

DINP

30.8

35.9

Exports of phthalic anhydride from the Czech Republic totalled 16,400 tons in 2017 against 14,900 tons in 2016.  Deza at Valasske Mezirici produces coal based aromatics in addition to phthalic anhydride and plasticizers.  Although DOP exports made a revival in 2017, rising to 9,600 tons against zero in 2016, DINP is far more important these days rising to 35,900 tons in 2017 against 30,800 tons in 2016.  In 2010 exports of DNP totalled only 800 tons against 24,000 tons of DOP. 

Polish imports of propylene 2017

In December 2017, 811 tons of propylene were shipped from Azerikhimia in Poland, this is 20% less than in November. The decrease in shipments is due to the increase in the volumes of intra-plant processing of monomer into isopropanol at the Azerbaijani enterprise.  In 2017, 10,111 tons of propylene was delivered to Poland from Azerkimya, 14% less than in 2016.

Grace-PDH Polska

W. R. Grace & Co. has contracted to license its UNIPOL® PP Process Technology to PDH Polska for the new plant at Police, with a capacity of 400,000 tpa.  The PP line is expected to begin operations in 2022.  Grace's gas-phase UNIPOL® PP Process Technology provides the most advanced and broadest range of PP homopolymers and copolymers in the industry. As the simplest of all PP process technologies, with fewer moving parts and less equipment than any alternative, its reliable, stable, and predictable operation leads to lower capital, operating, and maintenance costs.

Czech Petrochemical Imports

(unit-kilo tons)

Product

Jan-Dec 17

Jan-Dec 16

Ethylene

3.2

124.9

Propylene

45.4

133.2

Butadiene

38.2

54.0

Benzene

72.9

84.2

Ethylbenzene

20.0

56.5

Styrene

17.2

14.8

Grupa Azoty-finance

One of the biggest challenges in the implementation of the propylene and polypropylene production plant at Police will be financing.  The new propylene and polypropylene installations together with logistics facilities will cost Azoty about zl 5 billion. However, this is an estimate and it cannot be ruled out that the investment will be even more expensive.  Its financing will not be a simple matter.

The problem is that Grupa Azoty has other investments to consider at Pulawy, Kedzierzyn and Tarnow. The long-term loan agreement, signed on January 25, up to €145 million is to support some of the company's investments, as well as to help in the research and development of Grupa Azoty.

Due to the EIB agreement, Azoty will be able to finance the construction of a nitric acid installation in Pulawy, as well as an investment in a plastics compounding plant. 

These funds, although they will not be used at the propylene and polypropylene production plant that is to be built in Police, will certainly give some financial comfort to the company. In the end, €145 million is currently over zl 600 million.  Therefore, one can try to say that this particular loan will make it much easier for the company to finance the key investment project in Police for the current management.

Polish Chemical Production (unit-kilo tons)

 Product

Jan-Dec 17

Jan-Dec 16

 Caustic Soda Liquid

350.9

307.7

 Caustic Soda Solid

78.5

69.7

 Ethylene

482.8

447.0

 Propylene

340.2

337.7

 Butadiene

56.0

54.7

 Toluene

19.2

15.9

 Phenol

43.9

40.0

 Caprolactam

167.2

164.4

 Acetic Acid

25.2

8.8

 Polyethylene

324.1

316.6

 Polystyrene

50.8

57.2

 EPS

90.2

89.9

 PVC

269.3

259.3

 Polypropylene

253.4

241.4

 Synthetic Rubber

224.5

221.7

 Ammonia (Gaseous)

2779.0

2623.0

 Ammonia (Liquid)

98.4

95.9

 Pesticides

47.3

31.7

 Nitric Acid

2372.0

2367.0

Nitrogen Fertilisers

2082.0

1970.1

Phosphate Fertilisers

463.8

470.5

Potassium Fertilisers

426.4

388.2

Among the activities carried out by the Grupa Azoty, which are part of the concept of a closed economy, are the construction of denitrification and flue gas desulphurisation installations in the off-site CHP plant in Tarnow. This investment will not only contribute to the reduction of emissions of sulphur oxides and nitrogen oxides, but also to the formation of magnesium sulphate used as fertiliser in agriculture. The project budget is 90 million zlotys.

Recently, the Azoty has also invested in a dry ash installation that enables the use of ash.  This waste will be 10% transferred to external customers for further use, eg in construction.  The environmental aspect also appears when implementing development investments. For example, the change of phosphoric acid production technology in the Police plant for zl 67 million will not only improve the efficiency of production processes but will also reduce the amount of pollutants in the generated acid and waste.

The chemical group also signed a letter of intent with the copper giant KGHM. The agreement deals with the development of technology in the field of mineral processing by means of physical, chemical and thermal methods.  The project of cooperation between the Grupa Azoty and KGHM is extremely promising in this context and uses a wide range of synergies in production, processing and raw material picking.  KGHM is Europe's only producer of rhenium and perrhenate from its own resources.

MK Kikinda-tender

Serbia's economy ministry has called a tender for the privatisation of methanol producer MSK Kikinda.  The starting price in the tender is set at 38.5 million euro ($45.3 million) and the deadline for the submission of bids is 9 February 2018.  The tender will be open to Serbian and foreign companies active in the chemicals industry, with an annual revenue of at least €150 million.  In September, the International Monetary Fund (IMF) urged state-owned gas monopoly Srbijagas to dispose of non-core assets by selling its stakes in MSK Kikinda, and HIP Azotara Pancevo.

LNG terminal Swinoujscie

Poland decided to expand the LNG terminal in Swinoujscie to 7.5 billion cubic metres per annum as part of the strategy to give up Russian gas by 2022.  However, Gazprom may have a role to play unless Poland can find enough contracts for the purchase of LNG.

In 2017 PGNiG (the only user of the terminal) increased the volume of the contract for the purchase of LNG with Qatar to 2 million tpa (about 2.6 billion cubic metres) and signed a five-year contract with the British Centrica on the supply of LNG from the USA.  The second contract is much smaller and implies the supply of only 9 cargoes, or approximately 0.2 billion cubic metres per annum.

Currently the terminal has a capacity of 5 billion cubic metres per annum but was initially built with the possibility of expanding to 7.5 billion cubic metres.  The Polish authorities are considering expansion of the terminal, together with the project of building a Baltic Pipe gas pipeline to Norway with a capacity of up to 10 billion cubic metres per annum.  The current contract for Russian gas will finish after 2022, under which Poland now imports about 12 billion cubic metres of gas per annum. 

 

 

 

 

RUSSIA

Russian Chemical Production (unit-kilo tons)

Product

Jan-Dec 17

Jan-Dec 16

Caustic Soda

1,239.0

1,134.0

Soda Ash

3,489.0

3,050.9

Ethylene

2,860.0

2,823.0

Propylene

1,876.7

1,976.9

Benzene

1,359.0

1,240.8

Xylenes

493.4

568.5

Styrene

645.0

603.4

Phenol

201.5

222.2

Ammonia

17,100.0

16,100.4

Nitrogen Fertilisers

9,993.0

9,517.0

Phosphate Fertilisers

3,886.0

3,473.0

Potash Fertilisers

8,645.0

7,729.0

Plastics in Bulk

7,759.0

7,735.0

Polyethylene

1,980.0

2,104.0

Polystyrene

541.0

537.3

PVC

945.0

824.6

Polypropylene

1,451.0

1,363.2

Polyamide

159.0

155.5

Synthetic Rubber

1,572.0

1,488.7

Synthetic Fibres

171.0

138.1

Russian chemical production, Jan-Dec 2017

According to government statistics chemical production in Russia rose by 4.2% in 2017 in physical quantity over 2016, although profitability looks set to be lower for most producers when all the results have been reported.  The total production of polymers in Russia in 2017 amounted to 7.759 million tons, which was 2.3% up on 2016.  Polyethylene production rose 1.5% to 1.98 million tons, whilst polypropylene production rose 1% to 1.451 million tons.  Polystyrene production rose 0.7% to 541,000 tons, and PVC rose 15% to 945,000 tons.  Polyamide production rose 2.2% to 159,000 tons.  Production of synthetic rubber in Russia rose 2.7% in 2017 to 1.572 million tons. 

Amongst the major fertiliser producers, Fosagro increased production by 12.5%, to 8.4 million tons, Uralkhim by 4% to 6.3 million tons, Akron by 16%, to 6.1 million tons.  In 2018, Fosagro expects to increase production by 10% to more than 9 million tons.  Despite the rise in production profitability was lower in 2017 against 2016 and 2015.

The chemical industry remains one of the strongest performing sectors of the Russian economy, but progress in expanding the range of products is generally very slow.  Of the major investments only ZapSibNeftekhim’s new petrochemical complex at Tobolsk is progressing to schedule whilst other state backed mega-projects face questions over logistics, feedstock supply, etc.  Finance and borrowing represent the main challenges to projects being undertaken in the private sector or for those producers where the state does not provide direct support.  Companies such as Kuibyshevazot, Metafrax and Shchekinoazot are successful enough to be able to implement strategic investments in new projects and capacity expansions, but many other companies are severely hampered by borrowing restrictions.   Delays for some projects can increase the costs dramatically, at the start of 2018 the Kazan Silicon company responsible for a metalosilianes project was declared bankrupt whilst delays have now been flagged for the Ivanovo Polyester Complex for PET and polyesters. 

 

Russian chemical trade, Jan-Dec 2017

Chemical and rubber exports constituted 3% of total Russian exports in 2017, whilst chemical product and rubber accounted for 18% of total imports.  Imports of chemical industry products in 2017 totalled $36.9 billion against $30.3 billion in 2016.  Exports rose from $14.8 billion to $16.8 billion, thus the trade deficit in chemical products rose in 2017.  Russia’s chemical product exports largely comprise low value commodities, whilst imports are predominantly made up of higher valued and specialised products. 

In 2017 imports of polymers and rubber, in addition to pharmaceuticals both rose by around 20% over the same period in 2016, largely due to higher raw material prices but also due to a slightly stronger rouble this year which had made imports more affordable.  Exports of polymers were largely unchanged in 2017, whilst in other areas of in the area of organic chemicals plasticizer shipments have risen.  The introduction of new acrylates production at Salavat has helped reduce the volume of butanol exports from Russia, as internal processing has increased. 

Russian chemical engineering & import subsitution

Replacing imports of advanced chemical products and reducing dependency on foreign technology represent long term goals for the Russian chemical industry, but signs of progress are scarce.  The financial collapse of the project at Kazan for a 40,000 tpa plant for methylchlorosilanes, the first of its kind in Russia, reflects the difficulties of implementing expensive plans and the difficulties in borrowing.  In the Kazan case, the dramatic rise in project costs following the significant fall in value in the rouble in 2014 caused the bankruptcy of KZSK-Silicon, taking the local bank Spurt with it. 

The weaker rouble that resulted from Russia’s foreign policy actions in 2014 was supposed to provide a stimulant to domestic chemical engineering, but there is no indication that this is happening.  In terms of financial backing the only source for Russian projects that could constitute a full-fledged competitor to the mechanism involving foreign finance is the National Welfare Fund.  However, the fund's resources are inaccessible to a wide range of projects and investors because of the specific conditions for their distribution.

Some of the challenges to increasing the diversification of chemical products are surmountable, such as overcoming problems with raw materials, quality, service and innovations, etc.  The key problem is the virtual impossibility to borrow in Russia for a large capital-intensive project.  At the same time, prohibitive or restrictive measures (recycling duties, import duties, special clauses in license agreements, special tariffs for transportation of domestic equipment, etc.) will not have a positive effect without the creation of an effective and affordable mechanism for project financing in Russia.

The World Cup and Russian chemical production 2018

In those Russian regions where the World Cup is being held this year chemical producers are being asked by the FSB either to stop production or at least reduce operating rates during the tournament, to be held between 14 June to 15 July.  Regions that could be affected include Nizhny Novgorod, Kaliningrad, Kazan, Samara, and Volgograd.  Similar measures, according to Rostekhnadzor, were made during the Olympic Games in 2014 and the FIFA Confederations Cup in 2017.  Complete stoppage for some producers may be extremely difficult, producers have already explained the nature of the continuous operating cycle used in the chemical industry.  Kaustik at Volgograd is prepared to strengthen industrial safety measures at its facilities to limit emissions but has no intention to stop production. 

A number of producers in the Nizhniy Novgorod region have also explained their positions, including the Kstovo refinery at Lukoil, SIBUR plants, Korund, etc.  Lukoil has stated that stopping production at the Kstovo refinery is impossible but the plant is ready to develop a plan of measures that will monitor the production status around the clock during the championship.

 

 

Russian petrochemical projects

ZapSibNeftekhim Construction Progress

 

Mar-17

Jun-17

Sep-17

Dec-17

Overall

50.0%

56.0%

65.0%

70.9%

Design

86.0%

92.0%

97.6%

98.6%

Construction

32.0%

38.0%

45.8%

54.0%

Industrial facilities

25.0%

50.0%

71.3%

77.3%

Metal structures

40.0%

55.0%

77.0%

86.0%

Materials & equipment

57.8%

66.0%

87.0%

91.3%

Logistics

10.0%

28.0%

40.0%

51.9%

Steam Cracker

44.0%

58.0%

67.4%

72.4%

Polyethylene

30.0%

43.0%

64.5%

70.5%

Polypropylene

33.0%

45.6%

69.1%

77.3%

ZapSibneftekhim update 2017

The overall progress in the construction of ZapSibNeftekhim amounted to 70.9% by the end of December.  The design is completed by 98.6%, construction and installation works by 54%. The supply of materials and equipment is completed at 91.3%.  The construction of the complex involved 1,100 units of construction equipment.

Progress in the pyrolysis plant is 72.4%, the refractory lining continues, the installation of secondary heat exchangers and the steam drum has started, and the main electrical equipment is being installed.  The installation of polyethylene is completed by 70.5%, the basic foundations are completed in full. Work continues on the installation of metal structures, sandwich panels, equipment, air ducts and electrical lighting devices.

 At the polypropylene plant, the first four process air subsystems for instrumentation and compressed air were transferred to begin pre-commissioning.  The installation of technological equipment is continuing, in parallel, the installed units install thermal insulation, the overall progress of the work is 77.3%.

The degree of readiness of the logistics platform of the complex is almost 51.9%. The laying of underground and above-ground pipelines, installation of heating, ventilation and air conditioning equipment, metal structures continues. Also, anticorrosion protection and fire protection is applied to steel structures and pipelines.

The construction of industrial facilities is completed by 77.7%. Construction and installation works at the central distribution substation were completed. The installation of metal structures at the interprocess pier of technological pipelines was completed.  124,000 tons of metal structures were installed on the ZapSibNeftekhim site (86% of the total work volume), 275,000 cubic metres of foundations (94%) were installed, 328 kilometres of underground pipelines (90%) were laid.

The configuration of the ZapSibNeftekhim project involves the construction of pyrolysis units with a capacity of 1.5 million tons of ethylene per annum (Linde AG technology, Germany) and 500,000 tons of propylene, 240,000 tons of high-margin by-products (butadiene, butene-1, MTBE, pyrobenzene). The project also envisages the construction of a production of various polyethylene grades with an aggregate capacity of 1.5 million tons per annum (INEOS technology, UK), polypropylene production facilities with a capacity of 500,000 tons per annum (technology from LyondellBasell, the Netherlands).

By the end of the first half of 2017, ZapSibNeftekhim had completed a total of 56.6% of construction of the pyrolysis unit: at Tobolsk.  The laying of pipelines of underground communications is continuing including the installation of metal and reinforced concrete structures.  Installation of equipment and internal devices of technological columns is being carried out, of which more than 8,000 tons have already been installed.

The polyethylene installation was 45.8% ready by the end of June 2017.  The installation of columns and beams in the reactor zones continues, whilst the concrete works on the extrusion building are underway.  The polypropylene plant had reached 43.6% of installation, including pipelines, which were completed at the end of July. 

ZapSibNeftekhim has started installation of silos for storage of polypropylene to the logistics platform.  This type of work is scheduled for completion in the autumn of 2017.  The logistics platform is intended for temporary storage, packaging and shipment of finished products.  In addition to silo storage warehouses in the facility will include a complex for packaging, storage and shipment; three overpass pipelines and a container yard of 300 containers per day.

Construction and installation work was completed at the central distribution substation with a voltage of 500/110 kV and at the main low-voltage substations (GPP) No. 1 and No. 2 of the ZapSibNeftekhim deep hydrocarbon processing complex.

The central distribution substation includes an open switchgear with a voltage of 500 kV, a closed switchgear 500/110 kV, GPP No. 1, 2 comprising an open 110 kV switchgear and a closed distribution device with a voltage of 10 kV.  The facilities will provide power supply to all substations and switchgear located on the territory of the plant and the technological facilities of the ZapSibNeftekhim complex.

Configuration of the ZapSibNeftekhim project involves the construction of the steam cracker with a capacity of 1.5 million tpa of ethylene (Linde AG Technology Company, Germany) and 500,000 tpa of propylene and 240,000 tpa of high margin by-products (butadiene, butene-1, MTBE, pyro benzene).  Also, the project envisages the construction of the production of various grades of polyethylene with a total capacity of 1.5 million tpa (INEOS technology), and the installation for the production of polypropylene capacity of 500,000 tpa (LyondellBasell technology).

Nizhnekamskneftekhim-ethylene project

The authorities of Tatarstan will create a working group on cooperation with the Chinese national corporation Sinomach to consider its involvement in the construction of the new ethylene complex planned for Nizhnekamskneftekhim.  Sinomach is a manufacturer of versatile machine-building equipment for the electric power industry, metallurgy, agriculture and forestry, shipbuilding, aeronautics, cosmonautics, transport and other spheres.

The construction of ethylene complex at Nizhnekamskneftekhim is scheduled to start in the second half of 2018 and the commissioning to take place in the middle of 2022. Thirty-six hectares were allocated for the complex where six high-performance pyrolysis ovens will provide a capacity of 120,000 tpa.  The new furnaces will not only increase the yield of ethylene and propylene, but also replace the morally and physically obsolete SRT-II furnaces.  Simultaneously with the furnaces, an overpass is built that will connect the pipelines to the main production line. 

The ethylene complex will use naphtha from the neighbouring refineries belonging to Tatneft, requiring around 1.77 million tpa.  In addition to ethylene, the complex is being designed to produce propylene, benzene, butadiene and other products. 

The main partner of TAIF Group in the construction of the ethylene complex is Linde.  After introducing the second 600,000 tpa cracker by 2025, ethylene capacity at Nizhnekamskneftekhim will rise to 1,8 million tpa.

In the past few months TAIF has been in close talks with Linde regarding petrochemical investments in Tatarstan, including signing a memorandum in June which defines the main areas of joint activity until 2025.  The memorandum implies a number of contracts for both gas separation and technical gases, and most importantly for the four stages of the ethylene complex of Nizhnekamskneftekhim.  The initial stage of the Memorandum was a basic agreement for the design and commissioning of the first stage of an olefin complex with a capacity of 1,200,000 tons of ethylene-a new production of EP-600. 

Nizhnekamskneftekhim will provide financing whilst from the German side it is necessary to receive confirmation of financing from the credit expert agencies.  After that, the design work will begin.  Nizhnekamskneftekhim is to develop a project package of documentation and working design.  In parallel, the development and delivery of equipment will be conducted.  Traditionally Nizhnekamskneftekhim has worked closely with Lummus Global, particularly in the 1990s when the cracker was being upgraded and modernised.

The necessity of implementing the project on construction of the company’s own power generation for industrial enterprises of Nizhnekamskneftekhim is dictated by the annual growth in electricity consumption in the conditions of production expansion and commissioning of new plants for processing of hydrocarbon raw materials, as well as annual rises in expenditures on purchasing electric energy and power.  The new facility is to be launched by May 2021.

Kazanorgsintez-cracker investments 2018

Kazanorgsintez has scheduled an update of three pyrolysis ovens in 2018.  The contract for their supply was signed with Technip in 2016. Technip will be responsible for engineering and supply of three pyrolysis ovens, operating by the licensed technology SMK. The project support will be provided by the representation office of Technip in the Netherlands. The sources of project funding for Kazanorgsintez are loans and own funds, with costs estimated at €25 million.  Undertaking these projects will eventually lead for the expansion of the ethylene capacity to 1 million tpa.  Moreover, it could facilitate the production of benzene which would allow Kazanorgsintez to reduce costs in the production of cumene through to polycarbonate. 

The capacity of the ovens will be 54 tons per hour. The pyrolysis ovens commissioning will allow to increase production capacity of ethylene for Kazanorgsintez to meet the demands of the polyethylene capacity.

Nizhnekamskneftekhim-power plant

The construction of a new power plant for Nizhnekamskneftekhim will commence in the first quarter of this year.  In addition to the energy problem, the energy source is designed to solve environmental one.  In the process of production, Nizhnekamskneftekhim produces a great amount of products of associated petroleum gases processing, which are by-products of the basic technological processes. Before that, they were utilized in the torches or burned in furnaces at the productions of Nizhnekamskneftekhim.

Waste will be disposed in the combustion chambers of gas turbines, wherein the process is carried out according to the environmental standards, meeting the stringent European and Russian requirements. Thus, the power plant will make a significant contribution in improving the environment of Nizhnekamsk. The agreement on construction of the new plant on a turnkey basis in Tatarstan in December was signed by TAIF and Siemens.  Siemens will supply two gas turbines SGT5-2000E and one steam turbine SST-600.  The project will be implemented by Siemens in cooperation with Turkish construction company ENKA.



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