Sibur, Sinopec Form Russian Gas Chemical JV

Russia's Sibur and China's Sinopec have closed a deal to form a joint venture to operate the Amur gas chemical complex (GCC) due to be built in the Russian Far East.

The Amur GCC near Russia's border with China is expected to produce 2.3mn metric tons/year of polyethylene and 400,000 mt/yr of polypropylene. The complex is due to come on stream in 2024, with its development to be co-ordinated with that of Gazprom's Amur gas processing plant, which will supply its ethane and LPG feedstock. The Gazprom facility will treat gas on route to China via the Power of Siberia pipeline.

Sibur will have a 60% interest in Amur GCC while Sinopec will have 40%. The partnership's creation comes after the pair agreed on its terms in June last year. Sinopec secured Russian regulatory approval to acquire its stake earlier this month.

The project is expected to cost $10-11bn. Sibur secured $1.5bn in bridge financing for the scheme from a syndicate of Russian banks this month, namely Gazprombank, Otkritie Bank and Sberbank.

"Sibur and Sinopec have a long track record of jointly delivering on large-scale investment projects and implementing advanced production technologies," Sibur's chairman Dmitry Konov said. "With Sinopec's involvement, we will be able to maximise the project's efficiency, in particular optimising and balancing the facility's future debt portfolio, while also enhancing its expertise in distribution across Asian markets."