KazMunayGas Begins Construction of Polyethylene Plant with Sinopec and SIBUR

Kazakhstan has begun the construction of a polyethylene plant in the Atyrau region, a joint project between KazMunayGas (KMG), China's Sinopec, and Russia's SIBUR, according to a press release from KMG on Monday.

The groundbreaking ceremony took place on March 31 in the special economic zone National Industrial Petrochemical Park in the Atyrau region and was attended by senior officials representing the partners in the project, The Caspian Post reports citing Interfax.

The first piles were driven on the site of a future Silleno polyethylene plant, which was preceded by necessary preparations and earthworks that started in September 2024, KMG said.

The plant will have a pyrolysis unit which will use the technology of the U.S.-based Lummus, an ethylene polymerization unit using the technology of Chevron Phillips Chemical (USA) and Univation Technologies (USA), as well as a butene unit using Axens technology from France.

The cost of the project is over $7 billion. The design capacity of the plant will be 1.25 million tonnes of polyethylene a year. Construction work is expected to be completed in 2028, to be followed by the commissioning of the plant in 2029.

The new plant will produce over 20 types of polyethylene, which will allow the republic to replace about 90% of polyethylene imports.

In early July 2024, within the framework of the 7th meeting of the Kazakh-Chinese Business Council, which was held on the eve of the summit of the Shanghai Cooperation Organization, KMG, SIBUR and Sinopec signed a protocol on the polyethylene project, confirming their intention to reach agreement on the final investment budget and to ensure a highest possible level of Kazakhstani content in the design work and procurement of equipment and materials.

By mid-July 2024, the polyethylene project had reached the final stage of the Front-End Engineering Design (FEED) phase.

The project's ownership is divided as follows: KazMunayGas - 40%, SIBUR - 30%, and Sinopec - 30%. The estimated cost of the project is $7.7 billion, the financing is expected to be provided by the stakeholders and to come from funds that will be borrowed from international banks. The feedstock for the new plant will be supplied from the Tengiz oil field by JV Tengizchevroil LLP through a pipeline, which will be built by KMG.