New PMMA plant for Novokuibyshevsk - Issue 236 || SANORS-plans to construct large chemical complex - Issue 268 || Russian cracker feedstocks - Issue 268 || Ricoal plans coal based chemical complex in Rostov region - Issue 268 || SIBUR, updated Q1 2013 results - Issue 271 || Synthos, Jan-Jun 2013 - Issue 274 || Eastern Petrochemical Company-challenges faced in completion of refinery & cracker - Issue 274 || Nizhnekamskneftekhim-FEED for new cracker - Issue 274 || Tobolsk-Neftekhim, gas fractionating plant - Issue 274 || Unipetrol-Ineos licence for Innovene HDPE plant - Issue 275 || Russian chemical industry projections 2013 - Issue 275 || Gazprom-Belogorsk gas-chemical & helium project - Issue 275 || Nizhnekamskneftekhim, polyolefin projects - Issue 275 || Russian benzene, Jan-Sep 2013 - Issue 275 || Russian paraxylene-PTA - Issue 275 || Nizhnekamskneftekhim-isoprene rubber - Issue 275 || TVK-butadiene project construction - Issue 275 || Russian investment in the gas-chemical industry - Issue 278 || Vyngapur to become centre for natural & associated gas - Issue 278 || VNHK-loan approved for Nakhokda petrochemical project - Issue 278 || LUKoil-Budyennovsk petrochemical investments - Issue 278 || Russian chemical production 2013 - Issue 278 || Novatek expandsf Purovsky gas condensate plant - Issue 278 || Russian styrene market 2013 - Issue 278 || Russian polycarbonates 2013 - Issue 278 || Russian synthetic rubber production 2013 - Issue 278 || Russian butanols production 2013 - Issue 278 || United Petrochemical Company-epoxy resins - Issue 278 || Russian butanol exports, Jan 2014 - Issue 279 || Russian pentanes, Jan-Feb 2014 - Issue 280 || Russian propane, Jan-Feb 2014 - Issue 280 || Grupa Azoty 2013 - Issue 280 || Synthos-Brazil - Issue 281 || Ukraine-financial performance chemcal companies 2013 - Issue 281 || Russian ethylene market, Q1 2014 - Issue 281 || Russian polypropylene, Q1 2014 - Issue 281 || Synthos-Q1 2014 - Issue 282 || Grupa Azoty investment projects - Issue 282 || Russian chemical production, Q1 2014 - Issue 282 || Prospects for Irkutsk petrochemical projects after Russian-Chinese gas deal - Issue 282 || Russian PTA import duties - Issue 282 || SIBUR-Sinopec jv for rubber production in China - Issue 282 || KZSK Silicon credit line - Issue 282 || UzIndoramaGasChemical - Issue 282 || Zapsibtransgaz-Gubkinsky - Issue 284 || Irkutsk Oil Company-Power of Siberia - Issue 284 || VNHK-Nakhodka - Issue 284 || United Petrochemical CompanyAlpek PTA & PET jv - Issue 284 || Gazprom neftekhim Salavat-acrylic project - Issue 284 || Nefis Cosmetics 2013 - Issue 284 || Air Products-new industrial gas project at Rostov - Issue 284 || Khimprom-Novocheboksarsk - Issue 284 || Uzbek petrochemical projects - Issue 284 || Turkmen PVC project - Issue 284 || SIBUR-Kstovo, ethylene expansion - Issue 285 || Russian ethylene and propylene - Issue 285 || Russian synthetic rubber market - Issue 285 || Oltchim, Jan-Sep 2014 - Issue 288 || Russian chemical industry, Jan-Oct 2014 - Issue 288 || Angarsk Polymer Plant-new polyolefin plants - Issue 288 || Synthos Q1 2015 - Issue 294 || Nizhnekamskneftekhim Q1 2015 - Issue 294 || Central European olefin production - Issue 295 || Synthos-Brazil - Issue 295 || Russian chemical production & markets, Jan-Jun 2015 - Issue 296 || Nizhnekamskneftekhim-updated ethylene project plans - Issue 296 || Russian phthalic anhydride market - Issue 296 || Saratovorgsintez-logistics - Issue 296 || Zapsibneftekhim & Yuzhniy Balyk - Issue 297 || Unipetrol-Technip polyethylene project - Issue 298 || Effects of low oil prices & rouble devaulation on Russian petrochemical industry - Issue 298 || SIBUR-energy products, first half of 2015 - Issue 299 || Rosneft project update-Eastern Petrochemical Company (VNHK) - Issue 300 || Nizhnekamskneftekhim new ethylene project - Issue 300 || Other Russian ethylene project news - Issue 300 || Kuibyshevazot, Jan-Sep 2015 - Issue 300 || Metafrax, Jan-Sep 2015 - Issue 300 || Russian phthalic anhydride, Jan-Sep 15 - Issue 300 || Samsung-aromatics complex at Ustyurt in Uzbekistan - Issue 300 || Czech petrochemical trade, Jan 2016 - Issue 304 || Czech synthetic rubber trade - Issue 304 || Kazanorgsintez Jan-Dec 2015 - Issue 304 || Nizhnekamskneftekhim Jan-Dec 2015 - Issue 304 || Angarsk cracker outage creates problems for Irkutsk petrochemical industry - Issue 304 || Russian LDPE market 2015 - Issue 304 || Russian paraxylene-PTA - Issue 304 || Russian benzene market, Jan-Feb 2016 - Issue 304 || Russian methanol domestic sales, Jan-Feb 2016 - Issue 304 || Metafrax Jan-Dec 2015 - Issue 304 || Russian butanol sales, Jan-Feb 2016 - Issue 304 || Russian DOP market-Sayanskkhimplast outage - Issue 304 || Russian phthalic anhydride market, 2015 - Issue 304 || Revised capacity of Amur Gas Processing Plant - Issue 305 || Gazprom processing Blagoveshchensk announces consultancy tender for Amur GPP - Issue 305 || Gazprom Design-Amur GPP - Issue 305 || Svobodny meeting in March, Amur GPP - Issue 305 || SIBUR starts preparations on the selection of the licensor for Amur Gas Chemical Complex - Issue 305 || Gazprom tender for 60.7 km section of pipeline Power of Siberia - Issue 305 || Work on checkpoint on Amur-China border - Issue 305 || NIPIGas-Amur GPP & domestic equipment. - Issue 305 || Lukoil sells Karpattneftekhim - Issue 315 || Russian rubber exports, Jan-Dec 2016 - Issue 315 || SIBUR-associated & natural gas prices - Issue 316 ||


Key chemical industry projects, markets & companies

Russia & neighbouring states

Project  Product  Company
ZapSibNeftekhim Ammonia PKN Orlen
Amur Gas  Benzene Unipetrol
VNHK-Rosneft Butanols MOL
Novy Urengoy Ethylene Synthos
PDH Poland  Propylene SIBUR
Nizhnekamskneftekhim Synthetic Rubber Kazanorgsintez
Irkutsk Oil & Other Projects Polypropylene Nizhnekamskneftekhim
Etana PVC Gazprom neftekhim Salavat
Ivanovo Polyester Paraxylene Karpatneftekhim
SafPet PTA Kuibyshevazot
SOCAR Polymer Methanol Shchekinoazot

Russian petrochemical industry wins from low oil prices

The petrochemical industry has been one of the star sectors in the Russian economy over the past few years, and has strikingly out-performed GDP which has been stuck mostly in the doldrums. Lower oil prices may have significantly dented the Russian government’s budgetary finances, but the trend has been broadly beneficial to the petrochemical industry. Both in terms of facilitating lower feedstock costs and the devaluation of the rouble Russian petrochemical producers have witnessed sharp rises in revenues and profits in the past 10 quarters. The devalued rouble has meant that Russian producers have been able to compete against imports on the domestic market and also for exports to be more profitable. The downside of the lower rouble relates to equipment and technology costs where Russia is dependent primarily on imports. Certain types of equipment can be replaced by domestic production, but most of the key plant licenses such as for olefins, polyolefins and organic chemicals are available only from foreign companies.

The major petrochemical project currently under construction in Russia comprises SIBUR’s ZapSibNeftekhim complex at Tobolsk in West Siberia, where the 1.5 million tpa cracker is scheduled for completion by 2019. Aside Tobolsk, the key project ideas are being developed in East Siberia and the Russian Far East. SIBUR is considering the construction of a similar complex to Tobolsk in the Amur region close to the Chinese border where Gazprom is currently constructing the world’s gas processing plant. Rosneft is in the throes of constructing a large refinery and petrochemical complex at Nakhodka in the Russian Far East whilst other petrochemical projects are being evaluated by Rosneft and Chinese partners for East Siberia. Petrochemical and fertiliser plants in the eastern regions of Russia can provide huge export opportunities to China and other parts of Asia and help to monetise feedstock potential.

Smaller but equally important projects are being undertaken in the western parts of Russia which indicate that Russia can expect to see a sharp rise in petrochemical production over the next decade. Low oil and gas prices help to encourage investing downstream and seeking value added opportunities. The main concern for Russian petrochemical companies is the state of the domestic economy which may have come through the worst of its most recent downturn, but offers little more than modest growth rates for the foreseeable future. Economic reform is seen by even by parts of the government as the key to unlocking Russia’s economic potential, but these reforms are largely in conflict with the regime’s primary concern of retaining power. Despite the political stagnation, the Russian chemical industry seems capable of performing strongly on its own and can be expected to become more important globally over the next decade.

Russia’s neighbours seek to add value

Russia’s western neighbours include Ukraine where polymer consumption revived in 2016 after the large falls in 2014 and 2015. Currently Ukraine lacks much of its own chemical production due largely to the political all-out with Russia and impact on feedstock availability. As the country strives to realign its economic strategy away from Russia towards European markets the country may offer opportunities as a chemical consumer and the possibility for jvs in small tonnage chemistry. Belarus operates a stable production regime for chemicals and petrochemicals, and depends on Russia for nearly all its feedstocks. Its main production areas include acrylonitrile, caprolactam, methanol, polyesters and olefins. Russia’s southern neighbours are characterized by large hydrocarbon deposits but low consumption in chemical products. Major projects in the petrochemical industry are underway in the construction stages in Turkmenistan, Azerbaijan and Kazakhstan, all of which are aimed at export activity.

Central European chemical industry, modernisation and innovation

Since Central European countries joined the EU in 2002 the chemical industry in this region has undergone huge changes in terms of technological conformity to EU technical standards. PKN Orlen and MOL have emerged as the dominant companies in the petrochemical industry combining assets in Poland and the Czech Republic, and Hungary and Slovakia respectively, whilst the consolidation and expansion of Grupa Azoty has created one of Europe’s leading fertiliser producers. Polish companies have been prepared to invest outside the country whilst at the same time seeking new products to be introduced to the market. By contrast to Central Europe, South East Europe’s chemical industry has regressed in the past decade but there are some indications of outside investment in Serbia and Romania. The major projects being undertaken in Central Europe include Unipetrol’s new HDPE plant, Grupa Azoty’s PDH propylene plant, Orlen’s new metathesis project for propylene and MOL’s synthetic rubber plant in Hungary.

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CIREC’s Monitoring Service for the chemical industries in Russia & neighbours, and Central Europe

CIREC provides a number of options for coverage of the chemical industry in the Eurasian economic area and Central Europe. In addition to the established report CIREC Monthly News, the Search Engine on the CIREC website grants the opportunity to look back in the archives whilst the Statistical Database provides a range of data including production, capacities, trade and company financial performance. It is possible to purchase separate parts of CIREC Monthly News customized under the following categories:

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Russian Chemical Trade Balance 2016

The Russian trade deficit in chemicals remains largely unchanged from 2015, although the amount spent on both exports and imports has fallen.  Imports have fallen in the past three years due to budgetary constraints from the government and the devalued currency, which has prevented companies from buying as much as before, whilst at the same time exports have fallen at least in value due to the significant changes in oil and gas pricing. 

Although there were slight declines in the value of import shipments for polymers and organic chemicals in the period January to November 2016, imports of pharmaceuticals actually showed an increase over the same period in 2015.  However, the volumes still remain insufficient to meet the demand from hospitals and the domestic manufacturers have thus far not been able to replace much in the way of imports.  Pharmaceutical production in Russia rose by around 8% in 2016, but this is not fast enough in terms of both quantity and quality to comply with the government’s ideas of import substitution.  Much hope is placed by Russian government on the new US President this year to soften economic sanctions and improve economic relations, but ultimately the success of the Russian economy depends on internal reform.  Efforts to push through liberalisation have to date have been easily thwarted by those with a vested interest in the current hybrid economic system, but until a political overhaul can be achieved the prospects for GDP growth will remain weak at best.  




CIREC Monthly News, May 2017, Issue No 317

Central European refining & petrochemical margins
Unipetrol-Neste Jacobs
Slovnaft maintenance investment April-June 2017
PDH Poland contractors and share issue
PKN Orlen-propylene supply to Basell Orlen Polyolefins
Rompetrol Rafinare-petrochemical investment
HIP Petrohemija-privatisation
Oltchim sale delayed to June to allow  due-diligence
Spolana seeking extension on mercury plant
Central European tyre market
Grupa Azoty-coal energy projects
Russian chemical trade and production 2017
Russian gov’t waives VAT on equipment imports
VNHK Project-Main Objectives
Siberia & Russian Far East
VNHK road access & marine terminal
TOR Petrochemical-VNHK
VNHK-raw materials
Petrochina-Power of Siberia
Gazprom selects Chinese company for Amur Gas Processing Plant
River terminal-Amur Gas Processing Plant
ZapSibNeftekhim project update
Russian feedstocks & petrochemicals
Russian propylene sales, Jan-Mar 2017
Bulk Polymers
Russian polyethylene imports, Jan-Mar 2017
Russian polyethylene production, Jan-Mar 2017
Astrakhan polyethylene project, construction start Q4 2017
Russian polypropylene, Jan-Mar 2017
Russian PVC market, Jan-2017
Russian polycarbonate Jan-2017
Etana PET project
Ivanovo polyester
Russian MEG market, Jan-2017
Russian benzene production, Jan-Feb 2017
Altai-Koks, Q1 2017 & 2016
Nizhnekamskneftekhim-benzene expansion
Kuibyshevazot-cyclohexanone restart
Shchekinoazot caprolactam modernisation
Russian orthoxylene, Jan-Mar 2017
Russian toluene sales, Jan-Mar 2017
Synthetic Rubber
Russian C4 sales, Jan-Mar 2017
Russian rubber prices Q1 2017
Krasnoyarsk Synthetic Rubber Plant 2016
Efremov Synthetic Rubber Plant 2016
Omsk Kaucuk-latex production
Kurskrezinotekhnika 2017
Russian tyre market
Methanol & Ammonia
Russian methanol market 2017
Skorovodino methanol project
Nakhodka fertiliser & methanol project
Togliattiazot 2016
Fosagro new ammonia and urea plants
Organic chemicals
Russian butanol exports, Jan-Mar 2017
Russian butanol sales, Jan-Mar 2017
Ural Plant of Plasticizers faces possible closure
Russian phthalic anhydride market
Other products
Kaustik Volgograd 2016
Khimprom Novocheboksarsk 2016
Russian caustic soda market 2016
Nefis Cosmetics 2016
Calcium hypochloritie project-Novocheboksarsk
Bashkir Soda 2016
Polyplastik 2016
Polyplastik Contracts & Targets
Polymir, Jan-Mar 2017
Belarussian polymer & chemical trade, Jan-Feb 2017
Ukrainian polyethylene imports
Ukrainian PVC imports
Ukrainian polypropylene market rise
Ukrainian benzene exports
Karpatneftekhim preparing to launch production of the end of May
Ukrainian chemical imports, Jan-Feb 2017
Central Asia/Caucasus
Kazakh polymer imports, Jan-Feb 2017
Shurtan Gas Chemical Complex expansion
Atyrau gas & chemical complex
Azerbaijan chemical production, Jan-Mar 2017
Azerbaijan-ethylene, propylene and polyolefin projects


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