Russia's Sibur ramps up ZapSibNefteKhim plant to full capacity

Sibur, Russia’s top petrochemicals company, has ramped up its ZapSibNefteKhim plant in western Siberia to full capacity, signaling a shift in supplies of LPG away from Europe as more products are sold to Asia.

Sibur signed a deal in June to sell up to 1 million tons of polyethylene a year to China’s Sinopec from ZapSibNefteKhim, which uses LPG as a feedstock.

The Russian company, one of the biggest petrochemical companies in the world, has been gradually cutting LPG exports to Europe as it boosts ZapSibNefteKhim’s capacity.

In addition to oil, natural and super-cooled gas, Russia is increasing petrochemicals sales to China as it pivots away from Western markets amid growing tensions.

Privately-owned Sibur said ZapSibNefteKhim was now capable of delivering over 2.2 million tons of petrochemicals a year, mostly polyethylene and polypropylene.

At a televised meeting at the plant in Tobolsk, Russian president Vladimir Putin said global demand for the petrochemicals would grow by almost 4% a year, compared with just 1% for oil over the next five years.

He pledged state help for the industry.

Sergey Komyshan, Sibur’s executive director for marketing and sales, told reporters that ZapSibNefteKhim was exporting around 75% of its total petrochemicals output to China and Europe, leaving the remaining 25% for its home market.

In total, Sibur plans to export as much as 1.5 million tons of petrochemicals from the plant per year by 2025, worth up to 100 billion roubles ($1.3 billion), the company said.

Over time, Sibur also plans to increase supplies of polyethylene and polypropylene to the Russian market, Komyshan said.

($1 = 75.9530 roubles)

(Reporting by Damir Khalmetov and Oksana Kobzeva; Writing by Katya Golubkova; Editing by Jan Harvey and Mark Poter)

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