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The Russian government has approved the participation of the China Petroleum & Chemical Corporation (Sinopec) in a large petrochemical project. Thus, the Cabinet, led by Michail Mishustin, is acting in accordance with Moscow’s strategy of establishing closer economic relations with Beijing.
As per a framework agreement signed by the parties in June last year, Sinopec will have a stake of 40% in the petrochemical complex located in the Russian Far East.
According to Sibur, China continues to be the key driver behind the growth of global polymer consumption, and will be a target market for its petrochemical project.
The Russian government claimed that the Amur Gas Chemical Complex will become a major petrochemical plant in the country and internationally.
It stated: “The fact that a major international petrochemical company, Sinopec, will participate in the project highlights Russia’s investment appeal.”
Sibur wants to build one of the largest polymer factories in the world. The operation is intended to be in the Far East to be closer to the Chinese market as well as to the wider Asian market.
A brand new company is to be created, which will be called Amur Gas Chemical Complex. It will require investments of up to $11 billion and is due for commissioning in 2024 or 2025.
Once at full capacity, it will produce 2.3 million tons of polyethylene and 400,000 tons of polypropylene per year. Sinopec is expected to acquire 40 % of the shares in the joint venture.
Sibur’s representatives have indicated that they are ready to apply for co-financing of the Russian National Wealth Fund. Chinese companies are already actively involved in Russian projects, they are also involved in the extraction of Russian oil or natural gas.
